The American economy is no longer growing as it once did. From the end of World War II through 1980, the GDP of the United States grew 3.3 percent each year on average. In the 35 years that followed, GDP growth fell, yet there was enormous technological innovation, including the emergence of venture capital, the personal computer, the Internet, and the iPhone. High-growth, high-technology firms now account for one-fifth of the value of U.S. publicly traded companies, while real GDP growth averages just 2.6 percent per year. This led us to the question: If entrepreneurship is not living up to its growth potential, is the government to blame?
The debate, held at Rice University on April 24th, focused on explaining the declining rate of growth and argued the appropriate role(s) for government in entrepreneurship. The event was hosted by the Adam Smith Society's Houston professional and Rice Jones student chapters, along with the McNair Center for Entrepreneurship & Innovation at Rice's Baker Institute for Public Policy. Four experts on business and innovation joined the debate.
Arguing in favor of the motion, that government overreach and regulation are standing in the way of innovation and entrepreneurship, were Paul Martino, General Partner at BullPen Capital, and James Bailey, Assistant Professor of Economics at Creighton University's Heider College of Business. Arguing against the motion, that thoughtful public-private collaboration can be a successful means to entrepreneurial growth, were Yael Hochberg, Ralph S. O'Connor Associate Professor in Entrepreneurship (Finance) at the Jones Graduate School of Business, Rice University, and Aziz Gilani, Partner of the Mercury Fund. Edward J. Egan, the Director of the McNair Center, moderated the discussion.
Before a full auditorium on the Rice University campus, both sides made their case professionally and with civility. In particular, Aziz Gilani argued that government investment was a precursor to entrepreneurial activity, while Paul Martino argued that government should tread lightly, if at all, when regulating industries it does not understand. Both parties agreed that “do no harm" should be the government’s goal. Ultimately, the debate ended in a draw.
A video of the full debate and a brief slideshow are below.