Entrepreneurship and innovation are key drivers of economic growth. For decades economic dynamism and creative destruction powered U.S. economic growth. Now, however, there is evidence that American innovation is declining. The ratio of new firms to all firms has declined from 15 percent in 1978 to 8 percent in 2011, and since 2008 the number of business failures has exceeded new business starts. Prominent economists have linked declining entrepreneurship to slower growth rates, and have argued that unless the trend in innovation reverses, the economy might continue to stagnate.
Every small business requires access to capital in order to grow. Congress, concerned about these trends in entrepreneurship, passed the Jumpstart Our Business Startups (JOBS) Act in 2012 with the intent to make small business funding easier. In her new paper, "A Walk through the JOBS Act of 2012," the Cato Institute's Thaya Brook Knight provides a substantive yet easy-to-follow analysis of the law and associated agency rulemaking.
Join us as Knight describes how the Act changed existing securities laws and regulation, and explains what these changes mean for small business capital access. She'll also recommend ways for policymakers to continue to improve the funding climate for small business.