AOL co-founder warns US won’t return to its ‘pre-coronavirus economy’ anytime soon

AOL co-founder warns US won’t return to its ‘pre-coronavirus economy’ anytime soon

The U.S. won’t be getting back to normal anytime soon — certainly not in 2020. Tech entrepreneur Steve Case, a co-founder of America Online and author of the 2016 book “The Third Wave: An Entrepreneur’s Vision of the Future,” addresses that new economic reality in a July 19 op-ed for the Washington Post — and stresses that Congress shouldn’t think in a pre-coronavirus way.

“This week, Congress will likely take up the next steps in the economic response to the COVID-19 pandemic,” Case explains. “If the package is like previous efforts, it will focus on trying to turn back the clock to February 2020 — treating the economy as if it were Sleeping Beauty, merely needing to be awakened to be fully restored. This strategy is a mistake: Congress needs to stop solely backing efforts to restore the old economic reality and focus on how to develop a new one.”

The AOL co-founder goes on to say that even in the “pre-coronavirus economy,” many Americans “were left behind.” And Case lists three ways in which “Congress can help launch a new, more equitable era of entrepreneurship.”

Case’s first recommendation is to “make it easier for the earliest-stage start-ups to receive (Paycheck Protection Program) dollars and for all start-ups to access the Main Street Relief Fund.”

“PPP loans,” Case notes, “go to existing businesses to maintain jobs but not to new businesses that want to create them.” And his second recommendation is that “the government needs to be a counterweight to private capital that exacerbates geographic disparities in opportunity as the country responds to the crisis.”

“The pandemic is a devastating tragedy, but adversity tends to be met by the creation of new industries and new businesses,” Case observes. “This crisis will stir innovations in medicine, goods and services delivered at home, remote work and learning, and more. Where will these new firms grow? If the decision is left to the private sector alone, almost all of them will be in three states: New York, California and Massachusetts, which attract 75% of all venture capital. Great ideas to respond to this crisis are spread widely across the country — but capital is not.”

Case’s third recommendation is for “lawmakers” to “step in to address unintended inequalities of opportunity for female and minority entrepreneurs caused by the earlier relief bills.”

“Because these programs fund only existing businesses,” Case observes, “they reinforce opportunity gaps. Communities with thriving businesses get more PPP and Main Street aid; those that have lacked capital to get businesses off the ground in the past see little help now. The solution would be for Congress to direct unused PPP funds to start-ups led by female entrepreneurs and entrepreneurs of color, creating opportunities where they have not existed before.”

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