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1 1 (October 23, 2024)

handle is hein.crs/goverbx0001 and id is 1 raw text is: Cogrsioa Re eachSrvc October 23, 2024 Federal Assistance for State and Local Entrepreneurship Development Policies and Recent Legislation Entrepreneurship is often considered an engine of economic growth. Congress has authorized over 10 federal agencies to administer a number of programs to address common challenges faced by entrepreneurs. This In Focus summarizes how select federal policies may help entrepreneurship development at the state and local levels and provides examples of recent federal programs and legislation. This In Focus also includes considerations regarding a targeted or general approach to entrepreneurship development policies. In light of concerns about declining rates of entrepreneurship (see CRS In Focus IF12792, Is U.S. Entrepreneurship Declining?), Congress may review federal policies for state and local startup assistance programs. How Federal Assistance Programs May Support Entrepreneurship Development Federal policies designed to support entrepreneurs generally focus on developing amenities, infrastructure, networks, technical support, and financial and human capital, among other resources, to help new firms form and grow. These policies may be designed to address individual-, firm-, or community-level challenges. Federal programs generally do not provide direct financial support to for-profit businesses. Instead, federal agencies and their partners assist businesses with technical assistance and help entrepreneurs access credit markets for startup needs, operations, and expansion. Select Federal Programs and Recent Legislation The following examples highlight select types of organizations, communities, and business owners that have received federal support for entrepreneurial development activities in recent years. This section also provides examples of legislation proposed to expand such activities in the 117th and 118th Congresses. Entrepreneur Support Organizations The term entrepreneur support organization (ESO) describes entities that help catalyze entrepreneurship and help startups launch, grow, and become self-sufficient. ESOs offer support to startups through venues and activities such as incubators, accelerators, business centers, and coaching. ESOs may be established by nonprofit organizations, financial entities (e.g., banks, venture capital funds), universities, or state and local governments. Certain grant programs administered by the U.S. Small Business Administration (SBA) and the U.S. Economic Development Administration (EDA) provide funding for ESO activities. For example, SBA resource partners such as Small Business Development Centers provide technical assistance including business coaching, education about funding options, and guidance with startup planning. In the 118th Congress, S. 609 proposes providing grants to ESOs for entrepreneurship assistance for formerly incarcerated individuals. Separately, H.R. 699 would authorize the Department of Labor to study specific outcomes of entrepreneurial skills development programs. Underserved Communities and Disadvantaged Entrepreneurs Congress has authorized various federal agencies to administer programs to address unique circumstances faced by socially and economically disadvantaged communities and entrepreneurs. For example, the Minority Business Development Agency (MBDA) aims to foster, promote, and develop businesses and entrepreneurs through programs such as its Minority Business Centers and Capital Readiness Program. SBA's 8(a) Business Development Program provides business support services and federal contracting preferences, such as contract set-asides and sole-source contracts, to socially and economically disadvantaged business owners. In the 117th Congress, the Minority Business Development Act of 2021 (P.L. 117-58, Division K) authorized new entrepreneurship education development activities, including providing grants to eligible institutions (e.g., historically black colleges and universities, minority serving institutions, and tribal colleges or universities). In the 118th Congress, H.R. 4499 would establish an MBDA- led grant program for business accelerators for minority businesses. Startups in Rural Communities Federal economic development assistance programs are generally available to both rural and urban communities. However, certain agencies focus on challenges and opportunities unique to entrepreneurship and economic development in rural areas. For instance, the U.S. Department of Agriculture (USDA) administers grant and loan programs to support business formation in rural areas, including the Rural Microentrepreneur Assistance Program. Additionally, Congress authorized eight federal regional commissions and authorities (regional commissions) to address economic distress in certain defined socioeconomic regions. The regional commissions prioritize funding for areas experiencing economic distress-many of which are rural areas. Most regional commissions support entrepreneurial development and local business conditions. For instance, the Appalachian Regional Commission supported the formation of Appalachian Community Capital, a lending intermediary, to help entrepreneurs access capital. Its Appalachian Entrepreneurship Academy provides students with entrepreneurial skills and mentors. https://crsreports.congress.gov

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