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How the government can develop jobs

President Obama makes a statement to the press on the economy in the Diplomatic Reception Room at the White House -- November 12, 2009

TEXT OF STORY

Kai Ryssdal: Every Thursday, the Labor Department releases a statistic that measures first time claims for unemployment benefits. We don't usually spend a lot of time with it 'cause a weekly number on something big like the U.S. economy is a tricky thing. But the president took advantage of a slight drop in first time claims last week to work his way into the news today. He's going to host a job summit at the White House next month. We asked Marketplace' Steve Henn what that might entail.


STEVE HENN: If you ask experts and entrepreneurs what will create new jobs, they'll tell you credit and innovation.

Scott Shane studies entrepreneurship at Case Western Reserve University. He says if the administration wants to jump start job creation it needs to pay special attention to small businesses.

SCOTT SHANE: Being short on capital, it's very hard for them to expand and hire additional people.

Many entrepreneurs rely on credit cards and home equity to get started. But those lines of credit have dried up. So Shane would like the administration to replace that cash. But money alone might not do it.

John Stchur is CFO of a biotech firm in Detroit called Asterand. He says venture capitalists helped him hire more than a 100 people in the past seven years. If the government's serious, he says, it should create its own venture firms to focus on priorities like green technology.

JOHN STCHUR: That would be brilliant. Particularly those that are focused on the technology of the future.

Mary Sastry founded Sakti-3, a firm trying to develop the next generation of green batteries in Ann Arbor, Mich. All she wants is a level playing field for the green economy.

MARY SASTRY: That means that the people who produce petroleum and profit from petroleum are also paying the costs of that.

But she says other countries are jumping ahead in green tech.

SASTRY: Not only are companies competing in the marketplace, but countries are competing.

Sastry says new jobs will ultimately go to countries that constantly innovate. But right now she's worried the U.S. has already lost its edge, at least in clean tech.

In Washington, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.
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Great point Mary Sastry -

Its not just companies that compete -its countries (and regions!). Things such as infrastructure work, education, lower taxes, and access to resources (e.g. university labs) help. Consider the decisions that are made among large companies when deciding on the location of a new plant. Everyone offers tax abatements. Its usually access to skilled labor that determines the decision.

I also agree that government policies can help level the playing field (e.g. currency manipulation, environmental regulations, and protection of IP).

Creating jobs is easy. Be the lowest cost producer of goods that people want. Low cost means low taxes and low regulation. Ladle on top of that, the need to encourage capital investment and innovation. Obama is doing just the oppposite and instead holds a summit that will create 0 jobs.

How to regain our "edge" and start creating jobs most efficiently and effectively? Do what I can nearly guarantee this administration will not do: cut spending and lower taxes across the board.

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