Enterprise Policy

Assuming the Trump administration is serious about shrinking government, why not eliminate an agency whose sole purpose is to distort market outcomes by privileging firm size over performance and productivity? When it comes to government waste, the Small Business Administration is low-hanging fruit that has been over-ripe for a long time.

A recent working paper finds that management quality plays a pivotal role in determining whether firms expand, contract, acquire, or shut down.

In the Trump and China era, South Korea must move beyond export-led growth. Scaling up small firms and boosting productivity in services must be national imperatives.

The goal of industrial policy is to align business activity with national interest. So, why not use the tax code to reward companies that drive exports, domestic investment, R&D, and workforce training?

A new fixed effects model finds that larger firms pay between 11 and 20 percent higher wages than small firms.

Nations with businesses that spend more on R&D experience fewer firm closures. As such, policymakers should incentivize domestic businesses to invest more in R&D if they want to see industries succeed and grow, boosting the overall economy.

The goal for the next Canadian decade should be simple yet ambitious: to support and scale at least 100 mid-sized, export-oriented companies that dominate strategic niches in global markets—Canada's own generation of Mittelstand-esque champions.

Policymakers should not attempt to reallocate innovative resources from large to small firms. Instead, Congress should pass the Tax Relief for American Families and Workers Act of 2024 and expand the R&D tax credit. These measures will incentivize firms of all sizes to continue investing in productivity-enhancing and socially valuable R&D.

Instead of viewing foreign tech companies as competitors to domestic innovation, Canada must embrace their complementary role in fostering a vibrant, interconnected tech ecosystem.

With the CHIPS and Science Act, Congress intended to concentrate resources in a select few places to help them become self-sustaining, globally competitive advanced-technology regions. Unfortunately, four separate agencies established regional tech hub programs, disbursing awards across 48 states. Going forward, Congress needs to decide on one approach or the other.