Partisan pandering stifles innovation, entrepreneurship

Monday, March 12, 2007 12:00 pm
by Marc J. Lane


Illinois should lead the nation in entrepreneurship and innovation. But it doesn't, and partisan bickering in Springfield and Washington helps explain why.

The state is a great trading center, a master builder of financial markets, the site of federal research labs and a powerhouse of professional talent. Yet Illinois lags 20 states in the Small Business & Entrepreneurship Council's 2006 ranking of entrepreneur-friendly states based on the tax, spending, regulatory and litigation burdens they impose on small businesses.

Political squabbling over budgets and priorities, draconian regulations and ever higher taxes contribute to the competitive disadvantage in Illinois . Gov. Rod Blagojevich's recently proposed revamp of the state's corporate tax system could, by some accounts, triple the levy on businesses. But Illinois businesses also suffer the collateral damage of political wars waged to appease rigid constituencies.

Take stem cell research: Most medical researchers believe stem cell therapy might dramatically improve the treatment of disease. According to Opinion Research Corp., 72% of Americans support embryonic stem cell research. But pro-life opponents, who see the embryo as a human life, successfully lobbied against the Stem Cell Research Enhancement Act, the only bill President Bush has vetoed.

Until last month, the Illinois General Assembly hadn't backed a plan to support stem cell research. Since Gov. Rod Blagojevich bypassed the Legislature in 2005 and allocated a modest $15 million over two years for stem cell study, California, Connecticut, Maryland and New Jersey have more generously funded the research, leaving Illinois' biotech companies and medical research facilities in their dust. Only with the assent of newly elected suburban Democrats did the Illinois Senate, on Feb. 23, finally vote to legalize and publicly fund embryonic stem cell research, with the House following suit within a week.

Then there's the debate over immigration, which also threatens to handicap Illinois in the race for innovation. The controversy pits xenophobic proponents of mercenary border militias and the militarization of borders against those who favor a more balanced strategy that recognizes the extraordinary achievement of newcomers.

A recent Duke University study concluded that without permanent citizenship foreign-born inventors will likely take their intellectual property where it's welcome and compete with the U.S. Illinois, where Duke researchers concluded that 27% of tech startups were launched by immigrant entrepreneurs, would be among the states hardest hit. Let's urge our representatives in Washington to enact measures that curb illegal immigration yet help rebuild Illinois ' faltering competitiveness.

Petty, misguided politics will get us nowhere. Only constructive policy initiatives will give Illinois business its fair share of the resources it takes to lead.

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Reprinted with permission from Crain Communication Inc., Copyright 2007.

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