Anne Wojcicki, CEO & Co-Founder of 23andMe during The 2020 MAKERS Conference on February 11, 2020 … [+] in Los Angeles, California.
Getty Images for MAKERS
How does the US turn its economy around, create jobs, increase competitiveness, and become more innovative?
“We need to allow ALL people to fully participate in the economy and contribute their talents,” said Gayle Jennings O’Byrne, co-founder and general partner at WOCstar Fund—an investment fund focused on tech startups led by women of color (WOC), Native Americans, immigrants, and founders from the heartland. For far too long, venture capitalists have overlooked these founders of high-potential companies.
Federal Dollars To Support Women-And Diverse-Led Venture Funds
SSBICs [Specialized Small Business Investment Companies] should be a major cornerstone of the new administration’s policy,” said Trish Costello, founder and CEO at Portfolia and CEO/CEO Emeritus of the Kauffman Fellows, a training program for VCs. Portfolia is a venture capital firm focused on energizing the 7 million affluent women in the US who can invest in startups.
SSBICs are venture funds owned by women and people of color, which receive matching grants from the Small Business Administration (SBA). “They should pull out a lot of the onerous regulation. [Importantly,] the program needs to be run by someone with VC experience,” Costello said.
Investments in venture capital have become an important asset class for pension funds. It makes sense that pension funds serving educators, firefighters, and the police, would invest in funds that develop technologies to help them do their jobs better or are managed by people who look like them—women and people of color (POC).
Pension funds created Emerging Manager Programs for just this purpose. “Nearly all of that money goes to white guys spinning out of big brand name venture funds,” said Costello. “That doesn’t help anyone. The programs need to be run by people who reflect the population they serve and have those networks.”
Fortunately, there are now many women and diverse fund managers who can serve as mentors. There are also training programs for startups, including those from All Raise and Kauffman Fellows.
A source of funding for STEM (science, technology, engineering, and math) startups are Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants. Eleven federal agencies participate in these programs. There’s almost universal agreement that before private capital invests in cutting-edge technology, the government needs to fund the earliest research and development, commented Elizabeth MacBride, founder at Times of Entrepreneurship. She found a consensus among experts that, to restart innovation, Biden and Harris need to get Congress to increase funding to SBIR/STTR programs.
During Nagesh Rao tenure at the SBA, he worked on this chart, which illustrates why STEM startups … [+] and small businesses need research and development funding from the government.
Small Business Administration (SBA)
MacBride is reporting on more female scientists and researchers developing innovative technology and commercializing it. Yet, the total number of women-owned small businesses (WOSBs) receiving SBIR/STTR Awards decreased to 13% in 2018, down from 14.4% in 2013, according toAmerica’s Seed Fund: Women’s Inclusion in Small Business Innovation and Small Business Technology Transfer Programs commissioned by National Women’s Business Council (NWBC).
The NWBC plans to increase WOSBs participation in SBIR/STTR programs. It is a federal advisory committee, established to serve as an independent source of advice and policy recommendations for the President, the US Congress, and the US Small Business Administration (SBA) on issues of importance to women business owners and entrepreneurs.
NWBC has recommended to Congress that adequate resources be provided to outreach to universities and organizations that support women and POC-led STEM startups. Having served on the National Science Foundation SBIR/STTR subcommittee, Costello recommends that the 11 federal agencies diversify these advisory councils—making them half female and a third people of color and including entrepreneurs.
Applications for these grants are complicated and time-consuming. Participating agencies should offer the opportunity to do an initial pitch to determine if the company’s idea is a fit for the program. “The process to do these applications takes a significant amount of time and research to do,” said Liz Sara, chairmen of the board at NWBC and founder and president at Best Marketing. “If there were a quick pitch phase, it would eliminate women-owned businesses that are outside the scope.”
Using Tax Advantage Returns To Encourage Investment
NWBC is recommending increasing the Angel Investment Tax Credit cap to more than $50,000. Only about 1% of the wealthy are angels. Raising the cap would incentivize new angel investors and broaden the pool of investors, particularly women investors. If the administration feels that the tax credit will only make the rich richer, make the credit contingent on investing in female-and diverse founders, suggested Costello.
Since the Black Lives Matter protests, corporations have pledged billions in racial-equality programs. However, those dollars are not targeting venture funds and high-potential companies led by women and people of color. Use tax incentives to encourage large corporations to make these investments. These startups could be sources of innovative vendors, partners, strategic alliances, and future acquisitions.
Whether individuals or corporations, “encourage behavior through tax changes that cause you to stretch out of your normal way of investing and beyond your normal networks,” said Costello.
Expand Who And How People Can Invest In Startups
NWBC recommends that the SEC modernize an accredited investor’s definition to include not just people with high income or net worth but also those who are financially sophisticated. People are so much more sophisticated than when the SEC defined accredited investors in 1933 as wealthy people. You don’t need to be rich to know how to invest in companies, commented Costello.
“We need to invest in Black and Brown women venture capitalists,” emphasized Jennings O’Byrne. Let’s get creative in whom we think limited partners—investors in VC funds—can be. Whether you’re Asian, Black, or Jewish, there is cultural precedent for members of a community to invest in other members’ businesses. There is legal precedent, too. If average Americans—87% of all households*— can invest in crowdfunded companies, why can’t they invest in venture capital funds?
These funds are professionally managed, which de-risks them. Perhaps funds could include one or two special purpose vehicles that aggregate dollars from investors investing as little as $1,000. “Venture capital funds have the potential for outsized gains,” Jennings O’Byrne noted. “This has a secondary benefit of creating a new generation of investors who currently aren’t part of the investment process.” As with investment crowdfunding, the amount of capital Main Street investors invest could be limited.
Get State And Local Governments Involved, Too
Through WE Fund Venture, New York City co-invests—alongside five women-led venture funds—in technology startups founded by women and minorities. WOCStars is one of the five funds. “How can the new administration replicate this across the country?” asks Jennings O’Byrne.
How will you advocate for meaningful policies to support entrepreneurs and their funders?
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
