You can also read this article at Science Progress, CAP’s online science and technology policy journal, here.
The White House last week took a big step in answering businesses’ call for a more effective and efficient interface with federal government programs by launching the new Business USA portal. This single online resource enables businesses large and small to easily discover and research the wide array of federal programs and services provided by dozens of federal agencies to help them innovate and increase their competitiveness.
This is the latest step by the Obama administration toward breaking down bureaucratic silos, increasing interagency collaboration, and making the federal government leaner, more efficient, and more customer-friendly. But much still must to be done to build the modernized government that American workers, businesses, and industries need to stay cutting-edge and to compete for the jobs of the 21st century.
To better understand the significance of Business USA and where it can be improved swiftly—a key goal of the administration as the new portal goes through its “beta” testing phase of development—it’s important to break down three distinct but related problems currently keeping federal innovation-oriented business programs from performing at their peak potential. Specifically, what impedes better private-public business solutions to help our economy grow are:
- The problem of discovery—knowing what the federal government provides
- The barrier to customer service—too much red tape
- The lack of strategic coordination among programs with complementary goals and similar constituencies
Let’s look at each of these problems in turn before highlighting a slate of reforms the Center for American Progress presented earlier this year to the administration and Congress.
The problem of discovery
The federal government operates hundreds of programs and services designed to help businesses create jobs and grow the economy. These programs are currently managed, maintained, and operated by dozens of federal agencies and many of them overlap. But many businesses simply are not aware or are not easily able to navigate the plethora of programs that exist to help them obtain financing, export assistance, manufacturing assistance, research and development funding, technology licensing, technical assistance, or other forms of counseling. This is mostly because these programs are managed without clear coordination by many different federal agencies, each of which market them differently—or in some cases not at all.
The problem of customer service
Once a business has identified one or more federal programs in which it is interested and eligible, actually completing the application process can be difficult, time consuming, expensive, and confusing. Furthermore, separate requirements and applications for programs managed by separate agencies make it difficult for businesses eligible for many similar programs to access the ones best suited to their needs.
Just one case in point: The National Institute of Standards and Technology manages the Technology Innovation Program, a competitive grant program to help small- to medium-sized firms innovate in strategic technological areas. At the same time the Small Business Administration and 11 different agencies maintain the Small Business Innovation Research and Small Business Technology Transfer Programs. These programs are designed to help small- to medium-sized firms obtain funding to pursue risky technological innovations but require separate applications.
What’s more, program requirements—which range from size to ethnic, gender, or socioeconomic status of organizational leaders to geographic location to industry sector—are mismatched with assistance delivery mechanisms, which range from project grants to microloans to financing assistance to technical assistance and others. Better aligning eligibility requirements with assistance tools can make federal programs more flexible and better able to ensure that every eligible businesses in need gets the right kind of assistance it needs to innovate and grow.
The lack of strategic coordination
This keeps federal business programs from working together with complementary innovation programs aimed at university technology transfer, community development, workforce training, and trade assistance at the regional economic level. CAP’s Science Progress project in 2009 detailed the importance of these "regional innovation clusters," and more recently my colleague Jennifer Erickson and I discussed why businesses do not exist, thrive, or innovate in a vacuum—their success is interconnected with the success of the communities, regions, and industries within which they operate.
Whether for high-tech, high-growth startups or small-town mom-and-pop businesses with more modest ambitions, the best businesses plans are responsive to local economic conditions. Innovative businesses must take into account the availability of local assets and liabilities such as infrastructure planning, district or regional economic development initiatives, local workforce talent, formal or informal university partnerships, and proximity of both supply chain partners and customers. In short, the vitality of the many regional economies upon which our nation is built and the success of businesses in these economies are fundamentally intertwined, yet the current fragmented system of federal businesses assistance programs is not well-coordinated with other existing federal efforts to invest in these important determinants of success. That means that federal programs supporting a small business as well as a university technology transfer effort, a community college workforce-training program, and a regional economic development plan in the same region, might not coordinate whatsoever.
Enter the Business USA portal
The Business USA beta portal tackles the first of these three challenges—the problem of discovery—head-on. It creates one place where businesses can go to discover the plethora of existing federal assistance programs available to them. As my colleague Kristina Costa wrote in January:
You might think that the Small Business Administration would be the go-to place for all things small business—but that assumption leaves out loan programs administered by the Departments of Agriculture and Energy, among others. “It’s hard to know which [loan] is best for you if they aren’t all in one place,” says Christine Koronides, who oversees small-business policy for the White House National Economic Council.
The recent “State of the Federal Web” report conducted, among other things, an inventory of federal websites. Fifty-six federal agencies publish 1,489 top-level .gov domains—and a dizzying 11,013 lower-level websites. This isn’t a knot that Google can untangle on its own—important information can be buried in poorly formatted .pdf or .doc files that search engines may not be able to parse.
The increased awareness from consolidating many of these resources in one website stands to increase utilization rates of many of these programs and maximize the economic bang for the taxpayers’ buck. But while the Business USA beta portal addresses the discovery problem, it leaves unanswered the questions of customer support and strategic coordination.
Another step toward tackling the customer service challenge can be taken by implementing the Business USA hotline that President Barack Obama highlighted when unveiling the new portal and by doing a comprehensive review of existing program application requirements with the goal of streamlining and integrating as many of them as possible using existing executive authority.
To truly bring federal businesses and innovation programs into the 21st century, Congress needs to empower federal agencies to share information, increase the flexibility with which assistance tools can be applied to eligible firms, and coordinate strategically toward shared goals such as job creation, export expansion, regional economic invigoration, and technological innovation. Our proposal for a common application for federal innovation and competitiveness programs would move us further in the right direction by encouraging entrepreneurs, investors, universities, workforce interests, exporters, and other players to collaborate to access federal assistance jointly around shared goals.
Demand for these kinds of coordinated interagency programs focused on innovation clusters has grown among regional public, private, and nonprofit economic players and planners. Just look at the high number of applicants relative to available funding for the Energy Regional Innovation Clusters program, i6 challenge, and Jobs and Innovation Accelerator programs. Each of these programs coordinated the resources across six or more federal agencies to deliver funding to self-assembled regional innovation consortia with proposals that leveraged businesses, workforce, technology, and trade for innovation, job creation, and growth.
But this kind of interagency coordination and on-the-ground collaboration around shared goals needs to become the norm rather than the exception across the thousands of existing federal assistance programs. Rather than managing the rich array of existing resources independently as separate programs, a new structure such as the common application we propose could manage them as complementary tools to be deployed strategically to encourage bottom-up collaboration around shared goals of innovation and national competitiveness.
As my co-author Jonathan Sallet and I discussed in more detail in our recent paper, “Rewiring the Federal Government for Competitiveness,” shifting existing programs to empower businesses, entrepreneurs, inventors, researchers, and workforce development organizations to work together could go a long way toward spurring innovation that creates new economic value, business activity, and jobs in regions across the country.
President Obama announced his intention to take these next steps when he called for “one department with one website, one phone number, and one mission—helping American businesses succeed.” The ball is now in Congress’s court to allow the president to build on what he started with Business USA and to bring antiquated government bureaucracy up to speed with the dynamic needs of the 21st century global innovation economy.
Sean Pool is Managing Editor of Science Progress, a Center for American Progress project.