Cities and Innovative Business: Starting the Conversation

[youtube] This award round, the city of Cape Town is looking for a way to improve connections between the business community and the city. They believe these connections will foster faster, more innovative solutions to challenges there.

In the United States, the House of Representatives recently passed the Entrepreneur Access to Capital Act (EACA), which now moves on to the Senate for approval. The Act relieves restrictions placed on start-ups seeking investor funding. Legislation dating back to the 1930s Depression era had limited the ability of for-profit entrepreneurs to “crowd fund” in order to limit fraud (i.e. a con artist poses as an innovator, receives crowd funding, then disappears). Supporters believe in today’s world, with limitations on single donation amounts, funders will be connected to business owners and a level of trust will exist to protect against fraud. If passed, the law will allow innovators to raise up to $2 million through small donations of up to $10,000 each.

Through deregulation, the bill encourages innovation through small business. Cape Town’s idea, which would produce a platform of communication between city officials and entrepreneurs-to-be, could enhance the effectiveness of EACA. With unemployment remaining high in the US, such a platform could enable the city both to increase employment opportunities and target specific areas of the city or populations in need. Simply informing the community about planned public investments and economic development opportunities could spur the unemployed to start their own business, or expand an existing business to increase jobs.

There are clear benefits to the enhancement of public-private partnership tools. The EACA in the US is a statement of confidence in small businesses. Cape Town’s request is recognition of the potential for small business to innovate. Together, private enterprises bloom, jobs increase, and local challenges are met. Public-private partnerships, specifically local start-up partnerships with cities, are a win-win.

-          ­Terra Curtis