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Week of May 17 - May 21, 2004Welcome to the National Dialogue on Entrepreneurship and e-News, an electronic newsletter sponsored by the Kauffman Foundation of Kansas City for followers of the entrepreneurial economy. Through e-News, we bring you short summaries and analyses of various trends driving the innovation economy. Please feel free to share this with friends and colleagues. To subscribe, visit www.publicforuminstitute.org/nde/join/ Did you know that links to the day's entrepreneurship stories from across the nation and around the world are posted each weekday at www.publicforuminstitute.org/nde? Bookmark it and stay informed about the latest entrepreneurship news. |
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Forbes Best Business Locations The newest Forbes magazine list of Best Places for Business is out on the newsstands. The top ranking metros tend to share several characteristics. They host a large university, have a diverse and educated workforce, and have relatively reasonable business costs. This year’s index was compiled in cooperation with Economy.com. It ranks metros based on various factors, including business costs, crime rates, migration patterns, job growth, and a new measure of culture and leisure amenities. This year’s winner is Madison, WI. Other large metro areas in the top five (in rank order) include: Raleigh-Durham, NC; Austin, TX; Washington, DC; and Atlanta, GA. Forbes also assesses smaller metro areas using the same methodology. The top five smaller metro areas are (in order): Sioux Falls, SD; Fargo, ND; Iowa City, IA; Lincoln, NE; and Fayetteville, AR. |
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Another Look at Offshoring Offshoring continues to be a hot topic throughout the US, and passions on both sides of the debate are high. For a nuanced examination of these issues, take a look at a new report, “'Offshoring' Service Jobs: Bane or Boon-and What to Do?" by Brookings Institution researchers Lael Brainerd and Robert Litan. (Robert Litan also serves as Vice President of Policy and Research at the Kauffman Foundation of Kansas City.) The researchers note that we still lack good data about the extent of offshoring. Existing estimates suggest that something like 250,000 layoffs might be attributed to offshoring in a given year. While this number sounds large, it actually represents a tiny portion of the 15 million jobs that are lost involuntarily in the US economy each year. Yet, this data means little to someone who is laid off, and the concerns of dislocated workers cannot be ignored. How to respond? The authors offer several suggestions that include the following:
"'Offshoring' Service Jobs: Bane or Boon-and What to Do?" by Lael Brainard and Robert Litan; Brookings Policy Brief #132 (April 2004) is available at: http://www.brookings.edu/comm/policybriefs/pb132.htm |
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Health Insurance Debates Heat Up Recent surveys show that the high cost of health insurance is at or near the top of policy concerns for small business owners and entrepreneurs. Many people are deterred from starting businesses because of these high costs, and existing business owners must devote a large portion of their time and resources to managing health care programs for their employees. In an effort to raise attention to these issues, a coalition of groups sponsored “Cover the Uninsured Week” last week, and lots of events were held to discuss potential solutions to America’s health care crisis. For example, a task force of US Senate Republicans, led by Sen. Judd Gregg (R-NH) has released a comprehensive plan that proposes, among other things, to increase the use of Health Savings Accounts (HSAs) and Association Health Plans (AHPs), provide tax credits to make insurance more affordable, and create incentives for young people to purchase portable insurance plans. Not to be outdone, Senate Democrats have also introduced new proposals. For example, Assistant Democratic Leader Harry Reid (D-NV) has introduced S. 2359, the Healthy Families, Healthy Small Businesses Act. This plan would provide a refundable tax credit to reimburse small employers for a portion of their health insurance costs. |
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HSAs Gaining Traction While policymakers consider new solutions to the health insurance crisis, some of the old solutions seem to progressing well. Last year, a new law promoting Health Savings Accounts (HSAs) was enacted as part of the major Medicare reform package. Under this law, employers can authorize employees to create individual tax-favored accounts that can be used to pay for current medical expenses or as a vehicle to save for future medical expenses. HSAs will likely have high deductibles (averaging at least $1,000) but they do offer a means to save for major medical expenses. A new survey from Mercer Human Resource Consulting finds that many companies plan to offer HSAs to their workers. Overall, more than three-quarters of surveyed employers said that they will likely offer HSAs by 2006. An interesting finding is that very large employers (with more than 500 employees) and very small employers (10-49 employees) have the greatest interest in HSAs. For small firm owners, HSAs offer an excellent means to control benefit costs and to expand employee involvement in the process. This strong interest in a new type of benefit is further evidence of a hunger among businesses to find new tools for addressing the high costs of health care. |
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