I read with disbelief and anger The Oregonian article on the Business Energy Tax Credit program that Oregon politicians committed our state to fund. The buzzwords that fill government circles — “entrepreneurship,” “innovation” and “venture capital” — sound good and are sold as job creation, both for the near term and the long term.
Innovative start-ups are efficient engines of job creation and long-term economic growth. This makes perfect sense, in theory. In America, start-ups have accounted for almost all the net job creation in the past couple of decades. The public sector has from time to time collaborated with the private sector in playing an important role in igniting entrepreneurship. Government helped bring into being the venture-capital industry — witness the work of American Research and Development created after World War II. Government’s direct assistance in driving entrepreneurship was an important part of the foundation of American growth over the last 50 years.
The Silicon Valley was created largely by the Pentagon’s demand for breakthrough technology. State and federal investments across the country have also supercharged high-tech centers.
Replicating these successes is difficult. It requires the involvement of people who know what they are doing and have an understanding beyond political gain and feeling good about an idea. The road to the entrepreneurial future is littered with failed government schemes from around the globe in the last 20 to 30 years. Politicians too often treat entrepreneurship as a gravy train.
To support that statement, I’d name only four of multiple scores of failures in the last 30 years: Malaysia’s BioValley was a massive failure, Dubai’s entrepreneurial hub is awash with debt, America’s ambitious oil shale program failed and Norway has squandered much of its oil wealth.
One country stands out as a model of how government and the private sector can be successful with the use of the public treasury to promote entrepreneurship. Israel created a public fund in 1982 with $100 million. It was designed to attracted foreign venture capital and, most importantly, expertise. According to the Economist magazine, “Last year Israel, a country of just over 7 million people, attracted as much venture capital as France and Germany combined. Israel has more start-ups per head than any other country (a total of 3,850, or one for every 1,844 Israelis), and more companies listed on the NASDAQ exchange, a hub for fledgling technology firms, than China and India combined.”
Oregon’s governor and his staff appear to have misrepresented facts, or at best, did not know anything about what they were attempting when they pushed for adoption of the wind farm tax credit. In the future when Oregon’s leadership wants to be on the cutting edge of green technology, to promote entrepreneurship and create jobs, the Israeli model of public-private partnership should be emulated. Until the governor can demonstrate he believes in the stewardship of public funds and is forthright about costs, the Legislature should not pass any legislation for his signature that promotes state-sponsored entrepreneurship. He is inept, dishonest or both.