4 minute read 16 Mar 2021
Two woman looking at the machine

How public policy can fuel entrepreneurs and an inclusive recovery

By Ruchi Bhowmik

EY Global Public Policy Vice Chair

Action-oriented public policy strategist. Seeks to earn and maintain EY’s seat at the policy discussion table. Geopolitical and macroeconomic junkie. Will Ferrell fan. Buoyed by family and friends.

4 minute read 16 Mar 2021

Amid the COVID-19 pandemic, business leaders and public policymakers have a unique opportunity to build a more inclusive ecosystem together.

In brief
  • Through meaningful engagement on a range of programs, these groups can accelerate opportunities for underrepresented innovators.
  • Public-private partnerships help highlight obstacles to growth, such as needed regulatory reforms.
  • By using leading tools to address long-standing inequities, such as lack of access to capital, they can also drive significant revitalization.

I recently watched the latest EY documentary feature, "The Unstoppables." It was a welcome dose of inspiration that reveals how some of the world’s most exciting entrepreneurs stay resilient and agile in the face of constant change. Even amid today’s challenging business environment, they remain committed to creating long-term value that benefits their employees, their stakeholders and their communities. As we look ahead to a post-pandemic economy, public policy that fosters conditions in which entrepreneurs can thrive ― and continue to build long-term value ― is vital to a robust, sustainable and inclusive recovery. 

I have seen firsthand the impact that informed public policy can have in enabling entrepreneurial survival and growth opportunities during tough economic circumstances. While working in the Obama Administration during the global financial crisis of 2007-08, I had the honor of working directly on a range of initiatives targeted to helping keep businesses in business. We knew that fostering collaborative public-private partnerships was a critical instrument of innovation and growth. As part of this effort, we launched Startup America, a White House initiative in collaboration with the Kauffman Foundation and The Case Foundation to accelerate high-growth entrepreneurship throughout the United States; soon, hundreds of startup communities had formed across the country. It was a vivid lesson in the value of energizing local ecosystems of government policymakers, entrepreneurs and communities to engage with each other and foster new opportunities.

Those experiences inform the way I look at today’s crisis and the important role that public policy can play in supporting inclusive recovery. Three actions can help put policymakers and entrepreneurs on a shared path to a brighter future:  

1. Engage regularly with entrepreneurs and underrepresented innovators

Both policymakers and business leaders benefit from meaningful engagement with each other. Reaching out to better understand entrepreneurs’ priorities and roadblocks to growth helps policymakers create programs that can act as accelerants to economic opportunity.

Dr. Jennifer Riria, Kenya’s celebrated microfinancing leader featured in "The Unstoppables", often cites her lifelong efforts to cultivate productive relationships with local governments as vital to her business success. These connections have fostered opportunities to influence policy evolution and overcome resistance in her drive to fuel the potential of Africa’s women founders.   

At the same time, connecting with underrepresented innovators enables policymakers to better understand their ambitions and obstacles and enable inclusive opportunity. And it might go beyond the typical policy areas associated with entrepreneurship. For example, thanks to valuable feedback shared by immigrant founders during the Startup America initiative, the Obama Administration clarified important visa requirements for immigrant entrepreneurs, smoothing the path for ambitious, creative innovators to stay and flourish in the country.

For entrepreneurs, building positive relationships with policy makers often falls to the bottom of their overfull to-do lists. But helping policymakers understand what tools entrepreneurs need to build and grow can benefit not only the entrepreneur but the broader ecosystem.

2. Address barriers and lack of clarity

A key step in enabling opportunity is to dismantle the barriers that make it unduly complicated for innovators to thrive. Addressing the price of admission — including regulatory reforms related to starting a business, getting credit, paying taxes and resolving insolvency — can help more players get in the game. Improving clarity around regulatory structure is important too, as it helps to equalize the advantages that larger, more mature businesses have when navigating the regulatory landscape. Doing Business (pdf), an annual publication from the World Bank Group which measures the regulations that enhance — and constrain — business activity has recorded nearly 4,000 regulatory reforms since its first study was published in 2003. Uruguay stands out as a great example: since 2003, concerted efforts to improve access to credit, reduce startup capital minimums and address cumbersome tax protocols have helped foster easier routes for the nation’s founders.

3. Improve access to capital 

Access to capital remains vitally important to the entrepreneurs building tomorrow’s businesses and industries. The International Monetary Fund’s January Outlook found, in a sample of 13 advanced economies, that bankruptcies have fallen during the current recession as compared to past recessions. The decline was attributed in part to government transfers to firms, emergency lending programs and credit guarantees, and moratoria on bankruptcy filings. Policies and mechanisms that make it easier for innovators to tap into affordable capital should remain a priority as the world’s markets seek to drive growth. 

What’s more, as we move toward a post-COVID-19 recovery, it is important that we create opportunities across the board. Public policy can play a vital role in improving access for those in underrepresented communities, helping to fuel collective, inclusive growth. Governments have a unique opportunity to exercise a wider the ever range of tools to address inequities that limit participation. From holding financial institutions to task over capital access for underserved entrepreneurs, to implementing measures that support day-to-day existence and more, good public policy can be more than just a suite of conventional stimulus programs. Consider the impact of the pandemic’s caregiving crunch, which has impacted innovators with children or aging parents and has disproportionally affected women around the world, keeping many of them out of the entrepreneurial space. Policies that support caregiving, as an example, can in turn enable all innovators to thrive and help unleash the revitalization that economies around the world are seeking. 

This is pivotal moment for entrepreneurs and policymakers alike. Let’s not forget that for many entrepreneurs, including thousands of women and atypical innovators, the pandemic has presented new opportunities for their ambitions. We are witnessing a period of incredible creativity, agility and problem-solving right as the world needs it most. This is what sustains my optimism about the good that can come out of this global experience.

Through cross-sector leadership and productive collaborations among public policymakers, international multilateral organizations, communities and businesses, including entrepreneurs of the kind featured in "The Unstoppables," this is an extraordinary opportunity to harness innovative public policy to foster a robust, inclusive and widespread entrepreneurial recovery. 

Watch "The Unstoppables"

The world’s most unstoppable entrepreneurs reveal insights that can inspire us all to reframe our future. Watch on CNBC TV or on demand at cnbc.com/unstoppables.

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Summary

By harnessing innovative thinking in both the private and public sector, forward-thinking leaders can help reimagine what's possible for entrepreneurs in every community throughout the world. But to do so, they must begin by addressing traditional barriers and engaging more deeply with underrepresented innovators.

About this article

By Ruchi Bhowmik

EY Global Public Policy Vice Chair

Action-oriented public policy strategist. Seeks to earn and maintain EY’s seat at the policy discussion table. Geopolitical and macroeconomic junkie. Will Ferrell fan. Buoyed by family and friends.