Opinion
Forget the czar, we’ll settle for a chief
Ed Reed/Mayoral Photography Office
In his recent book, “The Third Wave,” Steve Case not only sheds light on where he thinks we are going with new technological advancements, but also makes two important points that relate to how government can and should approach its role in supporting entrepreneurship and innovation.
First, he notes that all too often people loop together small businesses and startups, where in fact, they are both very different. As Case notes: “In general, ‘startup’ is a term reserved for companies that can scale quickly and disrupt an existing category. Startups are generally backed by venture investors who see the potential for 10 or even 100 times the return on investment. Small businesses on the other hand, are generally funded with debt financing – a small business loan from a local bank, for example – and their aim is to grow steadily over time.”
This distinction is important, especially when it comes to what businesses need and how policymakers can support innovation and growth.
The difference between the two is especially visible in New York City, which has received a lot of positive attention for its recent emergence as a tech destination – Silicon Alley – and justifiably so. With the capital and talent in place supported by an unrivaled openness to new ideas, New York is an ideal place to start a new venture. However, the landscape looks a lot different if you are a more traditional brick-and-mortar small business. For them, New York is notorious for its bureaucracy, red tape and lopsided tax policies. Silicon Alley may as well be in a different city.
Understanding the difference between startups and small businesses is just the first step, however. The second point that Case notes is that government has an important role to play in creating an environment that allows businesses to start, sustain and grow. He calls for a “Third Wave Czar,” noting that, “what we need is a single person within the executive branch with the authority to work across – and above – the myriad agencies, putting a clear strategy in place and managing the day-to-day execution of it across government.” The idea being that the challenges faced by entrepreneurs cut across various government agencies. Such a role is not a long-term solution to eliminate bureaucratic hurdles, but could go a long way in keeping government “nimble and strategic” so we can keep “America on track” as Case argues.
The idea of a czar or a central figure in government to support businesses, reduce red tape and find ways to innovate is not new, yet it has never fully taken off in New York. In 2012, Mayor Michael Bloomberg created the first ever chief business operations officer, housed in the bullpen of City Hall and reporting to two deputy mayors. The role was intended to empower one individual in city government to find ways to make it more business-friendly. In his 2015 Opportunity Agenda plan, Gov. Andrew Cuomo called for the appointment of the state’s first chief small business officer, a position that would “be responsible for inter-agency coordination of all existing and new policies that impact creation and growth of New York small businesses.” Unfortunately, Mayor de Blasio did not keep the chief business operations officer position in his new administration and Gov. Cuomo has yet to appoint the State’s Chief Small Business Officer.
To support both startups and small businesses, government needs to roll up its sleeves and become more assertive and forward thinking. Innovators and entrepreneurs need to recognize that government has an important role to play in protecting the public, but government needs to recognize that it also has a role to support those that are creating employment opportunities for our citizens. Step one is to recognize that not all “small” businesses are alike.
While a czar is a great idea at the federal level, here in New York, business advocates would settle for a chief … or two.
Ken Biberaj is the chairman of the Board of Directors for the Manhattan Chamber of Commerce.