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Comment by JCThoughtscream | Hacker News Reader

So, wait, the federal government will actually actively help and support startups.

...

No, drawing a blank. Can't find anything wrong with this at all. This is actually how federal money should be spent, after all - investing in capital. Even if you view this through a lens of cynicism, the fact still stands that companies'll probably survive and thrive a lot more with governmental help than without. Which benefits everybody - more people make more money, which means they pay more taxes, which means the government can fund more startups, etc.

I like it. I hope it works out as intended. This is definitely one of the few inarguable ways to get an economy moving along.

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Europe in particular but also states, cities and regions in the US are filled with these types of programs designed to promote startups. When I was younger I've been in them both in Denmark and in England.

I'll go out on a limb and say that they have not helped one successful startup, who wouldn't have made it on their own.

The real benefit of these programs is that politicians get to say they are being proactive about helping startups. All we really need is less red tape and general meddling in what we do.

I'll go out on a limb and say that they have not helped one successful startup, who wouldn't have made it on their own.

Out a limb is right...come on, this kind of statement has no place in an intelligent debate. It's not even anecdotal, just baseless speculation.

I would say that I have plenty anecdotal evidence, but I prefer baseless speculation.

Anecdotal evidence is that a small (probably less than 10) prolific European investors like the Skype founders, Fon's Martin Varzavski et al have done a fantastic job promoting entrepreneurship Europe wide.

My baseless speculation is that they have probably done considerably more in the past 10 years than the last 20 years worth of EU and state sponsored 'enterprise programs' and my guess is for a fraction of the money spent on setting up all the 1000s of enterprise agencies, regional enterprise centers etc sprinkled throughout Europe.

US state and local governments are also filled with these local business development agencies and startup one stop shops. I just haven't spent any time looking at them, so yes I can only speculate that all of them together have had less positive effect on the world than one Paul Graham.

Of course since Obama unlike all the governments of Europe always surrounds himself with the smartest people in the world, this is sure to be different. This time government will finally come through for us and help us out.

While I'm sure your point is valid, how much of it is tainted by the fact that mom-and-pop startups simply aren't the sort that gets sexy coverage? Exactly how many regionally-locked businesses were actually dependent on these government business aid programs for their initial creation? And how many of them continue to thrive?

I rather suspect the tech industry may be somewhat self-absorbed in its own successes. Just because we managed to pull it off without government aid, for the most part, doesn't mean that our success stories are the norm. Besides, pushing a lawnmower through the red tape's quite a bit of help on its own.

I don't disagree with your conclusions; I just think that arguing the case in the way that you are makes your point of view irrelevant.

Why is federal money--which is distributed based upon bureaucratic and political whims--better for investing in capital than private investment, which has incentives to invest as profitably as possible? Wouldn't it work just as well for the government to lower taxes (or to spend more on public goods, i.e. healthcare) and allow that money to do what it was going to do anyway, more efficiently?

To put it simply, direct investment plays a lot better with business owners' incentives than lowered taxation.

It's a false corollary to expect lowered taxation to immediately equal greater spending - especially in times of economic flux, that sort of government action mainly encourages /hoarding/ behavior, which isn't good for the economy's health.

On the other hand, direct investment in startups gives an immediate incentive to spend - spend and grow.

Spending more on public goods like health care helps - the money we'd save with a public option is obvious to anybody that isn't a far-right ideologue. But that's /saving/ wealth, not /creating/ wealth. When you finally snip away all the excesses and waste generated by the current model of health care coverage, you still need something to pay for the cost of the improved system itself.

> that sort of government action mainly encourages /hoarding/ behavior

Citation needed?

> Spending more on public goods like health care helps

I think most of us are fine with government supporting the public good, building infrastructure, etc. But it's a little sleazy to directly fund startups. I mean, if my uncle donates to Obama's campaign, will my business get special treatment? (That's how it works here in Illinois, or so it seems...)

"It's a false corollary to expect lowered taxation to immediately equal greater spending - especially in times of economic flux, that sort of government action mainly encourages /hoarding/ behavior, which isn't good for the economy's health."

Hoarding usually means saving, and saving usually means investment, since most people save in interest-bearing accounts that one way or another turn out to be investments. You definitely want a good mix of investment and spending (not too much or too little of either) but it's rather ham-fisted for the feds to invest the money themselves.

http://www.commerce.gov/NewsRoom/PressReleases_FactSheets/PR... (...) Office of Innovation and Entrepreneurship The mission of the Office of Innovation and Entrepreneurship is to unleash and maximize the economic potential of new ideas by removing barriers to entrepreneurship and the development of high-growth and innovation-based businesses. The office will report directly to Locke and focus specifically on identifying issues and programs most important to entrepreneurs. Working closely with the White House and other federal agencies, this new office will drive policies that help entrepreneurs translate new ideas, products and services into economic growth. The office will focus on the following areas:

  Encouraging Entrepreneurs through Education, Training, and Mentoring
  Improving Access to Capital
  Accelerating Technology Commercialization of Federal R&D
  Strengthening Interagency Collaboration and Coordination
  Providing Data, Research, and Technical Resources for Entrepreneurs
  Exploring Policy Incentives to Support Entrepreneurs and Investors

It doesn't sound much like a fund to me, more like a clearing house or head start program for the self-employed.

The National Advisory Council on Innovation and Entrepreneurship will ... include successful entrepreneurs, innovators, angel investors, venture capitalists, non-profit leaders and other experts (...)

They have been influenced by this detailed and somewhat surprising report produced for the Small Business Administration in 2004 ('A National Assessment of Entrepreneurship and Regional Economic Growth and Development'): http://www.sba.gov/ADVO/research/rs256tot.pdf

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