Policy by the Numbers: Create Jobs

Alleviating Youth Unemployment Through Entrepreneurship

Thursday, October 11, 2012

Brittany Smith is a Policy Associate at Google.Unemployment numbers are pretty grim all around, but unemployment among youth is a particularly worrisome trend. In the United States, numbers from a recent jobs report indicate how hard it is for teens and early twenty-somethings to find work. The chart below, from The Atlantic, sums up the findings:

In Europe, youth unemployment numbers are even worse. As of May 2012, nearly 11 million young people were out of work across OECD countries. Youth unemployment has reached an alarming rate of 17.1%, more than double the unemployment rate affecting the general population. Greece and Spain have fared the worst, burdened with youth unemployment rates of more than 50%. And the near-term outlook is not much better: In, 2015, approximately 660 million young people will either be working or looking for work—an increase of 7.5% over the 2003 figure. What can we do to change course? We can start by creating an economic environment that nurtures entrepreneurship. While not a cure-all for general economic malaise, data supports the assertion that entrepreneurs are net job creators in an era with high unemployment and an economy that can’t create jobs at a sufficient pace to employ everyone entering the workforce. As new entrants to the workforce, youth and recent college graduates are particularly susceptible to slow job creation. Entrepreneurship is critical for economic growth, and its appeal to youth is something that policy initiatives should address. The notion of entrepreneurship as the solution to youth unemployment is gathering steam globally. One recent article describes tech startups as the “last refuge of Spanish optimism,” and another on CNN as being nearly the only option for young university graduates in Greece, who are pioneering a “digital renaissance” and aiming to reinvent the Greek economy. These articles point to an inspiring trend: Not only does entrepreneurship get young people into jobs, it means they’re creating jobs for everyone else, too. The challenge of realizing the economic benefits of youth entrepreneurship is (at least) two-fold: individuals and society need to embrace the reality of risk and the fear of failure, and we need an increased institutional capacity for rewarding entrepreneurial attitudes and cultivating an environment that makes entrepreneurs successful and enables recovery from failure. Innovative sites like Young Entrepreneur and Teens in Tech are playing a vital role in this regard, creating tools, resources, and networks for youth to create innovative businesses. By bringing resources tailored toward youth entrepreneurs online, youth can find and join a community of other entrepreneurial youth with whom to vet ideas, learn new skills, and fail and start over. Increasing the number and scope of programs like these will be important for bringing more youth into the entrepreneurial fold, shifting cultures and attitudes about what it means to be an entrepreneurial and what it means to be successful.While the global economy struggles to recover and many young people are unable to secure employment, encouraging entrepreneurship is a sustainable policy objective that can ensure growth. If you’ve seen other sites, companies, or resources dedicated to this issue, let us know in the comments!

Data Hangout on Air #2

Thursday, September 6, 2012

Today we hosted the second in a series of data-driven Hangouts on Air: a one-on-one interview with Michael Chui, co-author of McKinsey Global Institute's report "Big data: The next frontier for innovation, competition, and productivity." Video below!

This Week in Data: 8/3/2012

Friday, August 3, 2012

Happy Friday! Here is this week's highlights of data stories on the web!

InformationWeek's "7 Deadly Sins Of Big Data Users" covers 7 categorizes of the common mistakes organizations make as they attempt to dive into the world of data. The list comes from Josh Williams, president and chief science officer of Kontagent. Particularly worth note:

6. Pride: Decision-Driven Data Making. Rather than running tests and using data to confirm or deny assumptions, this Deadly Sin is where you dig through data to confirm your preconceived notions. "We see this happen a lot throughout organizations, both at the executive level and within teams," Williams said. "People try to confirm what they believe; they dig through data to find it." But the best data-driven cultures have mantras like: "Data wins arguments," he said. Let the data speak the truth.

If you've been waiting for the ultimate infographic that visualizes just how much data is created every minute, this infographic on Domo's blog is for you.

The Information Security Forum released a report, "Data Analytics for Information Security" [report behind paywall for non-members], the potential for massive amounts of data to help us detect and reduce cybersecurity risks. As Computer Weekly reports, "...the importance of big data analytics has never been greater, with data volumes growing at around 2.5 million terabytes a day."

On The Information Daily (formerly eGov Monitor), Vicky Sargent muses on the complexities of public data initiatives, focusing on the UK. Despite the lack of immediate returns on investment in public data release, Vicky notes:

The open data agenda has raised awareness of the value of data and other information assets in making good decisions. Maps, visualisations and other tools built using the data ‘because it is there’, have created wider awareness of new technologies that make data easier to manipulate, present, share and communicate.

Interactive, web-based tools are starting to put data into the hands of ordinary managers and decision-makers. Where they once needed to wait for data from an analyst or GIS specialist managers are increasingly able to access and interrogate datasets on demand through shared online tools.

Choosing a college for the job that comes after

Monday, June 25, 2012

This piece appeared in longer form as a May 2012 blog on the Washington Post's website.High school students across the country are now making choices about the colleges they will attend next fall. Whether choosing from among elite private colleges and flagship public universities, or from a list of open-access state four-year and community colleges, how will they and their families make those decisions?Until now, it has been almost impossible for students to include in their deliberations what graduating from specific colleges and their programs is likely to yield in terms of post-graduation jobs and salaries. But that is starting to change. This year, new information will begin to become available that will enable students to say: “If I go to College X and earn a degree in Y, I’m more likely to get a good-paying job after graduation than if I receive the same degree from College Z.”The primary source of new information the Wage Records Interchange System 2, a Labor Department-driven, data-sharing partnership among states. This data system could allow colleges to work with their states to track the success or failure of their alumni, no matter where they live. Twenty-two states have signed on so far. However, the data sharing system will only work if all 50 states sign the agreement. For students thinking about where to go to college, this could help them pick programs more likely to lead to earning a decent living. This is especially important for the growing number of minority and low-income students today on America’s campuses, largely at community colleges and open-access four-year colleges.But students are not the only ones who can benefit from this new information. Colleges will have a chance to examine whether their degrees are matched to labor market needs. In March of 2012, the US Bureau of Labor Statistics reported 3.74 million unfilled jobs. The National Association of Manufacturers reports 600,000 jobs go unfilled because there are not workers available with the skills to fill them. Colleges that assess employment outcomes for their graduates can see where such jobs are in their communities and expand programs that lead to solid jobs. This does not require dismantling philosophy, visual arts, or other disciplines that instill critical and creative thinking employers want. It does mean evaluating whether students can get what they need for good jobs while paring certain programs whose graduates are not getting jobs.Colleges can also use labor market information to assess and improve program quality. If an assessment of the local labor market matches college programs but program graduates aren’t being hired, that suggests a problem with program quality. Colleges can use employment data to understand which programs need improvement—whether in their information technology, engineering, or history degree programs—and then speak to employers about what graduates are missing that may be keeping them from being hired or earning competitive wages.That is a quantum leap from where we have been, and will begin to make labor market outcomes a key metric of value and excellence in the college sector. It’s time for states to make sure this happens by entering the data-sharing agreement. It’s the right thing to do for colleges striving to get better. It’s the right thing for students, their families, and the students’ future employers.Josh Wyner is executive director of the College Excellence Program at the Aspen Institute, an international nonprofit that seeks open-minded dialogue and enlightened leadership.

The state of broadband Internet access in Kansas City

Friday, June 22, 2012

Google is all about building data-driven products. When users of Google Navigation wanted the ability to circumnavigate heavy traffic, we began to use real-time traffic data to suggest alternate routes. When Google engineers began to tackle the problem of automatic translation online, they relied on translation data from hundreds of thousands of websites in many languages.Similarly, as we're in the process of bringing Google Fiber to Kansas City, KS and Kansas City, MO, we need to first understand how many people here already have access to broadband, and more importantly, how many don't. In order to get a grasp on the situation we partnered with a group that's full of community experts—the Mayor's Bistate Innovation Team (MBIT)—to commission a study on broadband adoption and digital literacy in Kansas City. Today, we're gathering with MBIT at the Kansas City, MO Central Library to release and discuss the data that we've collected.The good news is that a lot Kansas Citians seem to recognize the value of the web. Those surveyed said that the Internet can be helpful when it comes to job hunting, getting health information, and learning new things.

Unfortunately, our study also illustrates that there is a real digital divide in both Kansas Cities. We found that 25% of Kansas Citians don't have broadband at home, 17% are not going online at all, and 8% are only using dial-up or slow speed wireless connections.These stats lead to a follow-up question: why are one-quarter of Kansas Citians not connected to the web at home? We found that one of the primary reasons is cost. 28% of those who don't use said that they don’t go online because they don't have a computer, or because Internet access is too expensive. Meanwhile, 41% of respondents said they don't go online because they just don't think it's relevant to their lives.This is a big deal. Using the Internet isn't just about checking email and social networking. Access to broadband—and knowing how to use it—has become essential when it comes to jobs, education, business and much more. The web provides a wealth of information and services for Internet users, and people who aren't online are, simply put, at a huge disadvantage. A job search, for example, is much harder today without the ability to review job listings and apply online. Similarly, computer skills and digital literacy have become perquisites for the majority of job opportunities.From a policy standpoint, we can try and address these issues by encouraging policies that will make computers and Internet access more affordable, and promote digital literacy initiatives.But a lot of outreach and education needs to take place on a community level. And that's why this morning we’ve joined representatives from amazing local nonprofits, schools, libraries, city governments and other community experts in a discussion about how to take action and get Kansas Citians online using broadband Internet access. We'll post the video of our discussion here as soon as it's ready. In the meantime, you can peruse or download the full results of our study.The Google Fiber project is about making the web better and faster. But it's also about making the Internet more accessible for people throughout Kansas City. Digital inclusion here is a priority for Google, and it's clear that it's also a priority for community nonprofits and the local governments.Posted by Kenneth Carter, Policy Counsel at Google

Visualizing Economic Recovery: G+ Hangout Debate

Wednesday, May 16, 2012

At the end of March, we announced a data visualization competition we’re co-sponsoring with the Guardian Datastore.On May 15, we’ll gather three economic experts—Martha Lane Fox (lastminute.com, Antigone), John Kao (Institute for Large Scale Innovation, Daily Beast), and Larry Elliott (Guardian)—in a Google+ Hangout to discuss ways that the world’s economies might recover from the current recession as well as which countries are creating positive climates for new technologies. The Guardian’s Simon Rogers will chair the Hangout debate.The Hangout be broadcast via Hangouts on Air, which will stream live to Google+ and to YouTube.We want to know what you want to hear our experts talk about! Use the comment field on the Guardian post to let us know!

How the Internet powers German small businesses

Tuesday, April 24, 2012

(Cross-posted from Google's European Public Policy Blog)
In Germany, we’ve long believed that the Internet helps create innovative new small businesses - and that SMEs that go online, grow faster, export more and create more jobs than their offline competitors. But to prove it, we needed solid evidence. So we commissioned the Institute of the German Economy in Cologne (IW Cologne) to find out how the Internet has benefited SMEs - and the German economy.

The findings, released this week, are startling. Since 2007, they estimate that German entrepreneurs have founded 28,000 new businesses using online services from Google and other web companies. These new businesses have created nearly 100,000 new jobs and in 2010 generated EUR 8.6 billion in sales.
As part of the research, the consultants more than 11,000 Google customers in Germany. About two-thirds of them already sell their products online, a much higher proportion than the German average (a quarter of German businesses engage in ecommerce). Our customers report that selling online has kept them nimble and able to react quickly to new opportunities, reaching new customers (78%) or even new markets (35%).
The new study suggests that online business is particularly effective for small companies with up to nine employees. On average, these small businesses generate 42% of their sales via online advertising, while companies with more than 50 employees tend to generate only around 15% of their revenues via online.

Small, Internet-savvy businesses are also more innovative than the German average. In 2010, 20% of Google customers had their own research and development operations - nearly twice as many as at the average German company. Those same companies achieve 36% of their turnover with new products and services that they developed themselves, compared to only 23% for companies for whom the Internet plays a minor role.

“Of course there is no app for business success. But it is clear that savvy Internet use has massive advantages”, says Rene Arnold of the IW Cologne. “The internet is the steam engine of the 21st century.”

posted by Ralf Bremer, Senior Communications Manager at Google Berlin

Crowdsourcing job creation

Monday, April 9, 2012

With last week’s signing of the JOBS Act, startups will, for the first time, be able to raise capital from ordinary people through crowdfunding. Crowdfunding is the crowdsourcing of investment in growing companies. Crowdfunding expands the pool of capital available to startups by including unaccredited investors and pushes the whole process online so it doesn’t matter whether you are in San Francisco, California, or Sioux City, South Dakota.
Crowdsourcing is used successfully to solve difficult scientific problems and to answer everyday questions. Taking the process of innovating and accessing information out of siloed government and corporate institutions, crowdsourcing provides solutions in an efficient way while simultaneously gathering valuable social proof from a large sample size.
While often ineligible for regular bank loans because of lack of assets, startups in this country have a couple of options when seeking financing as they grow. SBA-backed lending and community development banks offer loans to small businesses; however, these loans can be 3.5% above market. For high-growth startups, equity financing makes more sense, but less than 3% of startups receive any financing. Less than 1% of Americans are angel investors. But, if Americans invested 1% of their total existing savings and investment capital in startups, there would be more capital available than all VCs and angel networks combined.
The U.S. stands to gain from having more startups. According to the Kauffman Foundation and the National Bureau of Economic Research, new companies are the primary driver of job growth in this country. An NBER study on job creation found that new companies create three million new jobs a year while older companies lose one million jobs annually.
As President Obama said last week when he signed the bill into law, “new businesses account for almost every new job that’s created in America.” So, let’s crowdsource job creation. Let’s crowdsource the financing of the companies creating jobs. This is the new meritocracy of financing—where anyone can compete and everyone stands to win. The U.S. is a nation of entrepreneurs, so let’s invest in each other.Posted by Melanie Plageman, Co-Founder of Motaavi

To grow the Internet economy, focus on small businesses

Friday, January 27, 2012

Over the past year and a half Google has invested significant resources in studying the impact of the Internet on economies around the world, the highlights of which are illustrated at www.valueoftheweb.com.

But we didn't have any insight into the Internet's impact on less developed economies. For example, how does the Internet’s impact on the economy in Turkey or Mexico compare with its impact in France? McKinsey & Company recently analyzed the economic impact of the Internet in 30 “aspiring” countries with both the scale and dynamism to be significant global players in the near future.

Roughly half the world’s Internet users are in aspiring countries according to McKinsey. But 64% of the people in these countries aren’t even online yet! That means there is enormous opportunity to increase Internet penetration in these markets, and in fact, penetration has been growing at 25% per year for the past five years. This growth potential is not limited to users, either—143,000 Internet-related businesses are created every year in these countries.

What should policymakers in these countries do to support the growth of the Internet economy? First and foremost, focus on getting small businesses online. 1.9 million jobs are already associated with the Internet in aspiring countries, but it’s astounding how quickly job growth occurs in comparison to more developed markets. Whereas in European countries we see 2.4 jobs created per job lost, this statistic jumps to 3.2 jobs created per job lost in the SME sector in aspiring countries. In a survey of SMEs across eight aspiring countries, McKinsey found that those spending the most on Web technologies have grown nine times as fast as those spending the least over the past three years.

A few minor policy changes would make it easier to get SMEs online in aspiring countries. First, governments should take steps to reduce the cost of doing business online. It cost $143 to register a domain in Malaysia, compared to $24 in the United States. In Nigeria, it takes 31 days to start a business, compared with seven days in Egypt. Making it more affordable for small businesses and entrepreneurs to get started and online quickly will have an immediate impact. Second, we need to encourage the development of human capital and improve access to financial capital. Digital literacy is low in countries like Morocco and Hungary, while Argentina lags behind its peers in access to loans and venture capital—barriers that lead to fewer people starting businesses online. Finally, access to the Internet in general needs to be more affordable and open. The baseline cost of access to the Internet in Turkey is almost twice the Central and Western European average, while half of Mexicans surveyed cite the cost of access and hardware as the primary barrier to getting online.

It’s clear that the Internet is quickly becoming a critical part of growing the economy for both developed or aspiring countries. Adopting the right policies to facilitate innovation should be top of mind for anyone considering Internet regulation.

posted by Betsy Masiello, Policy Manager at Google

Figuring out how much the Web is worth

Friday, January 20, 2012

Today we’re launching a website called Value of the Web to collect research that sheds new light on how the Internet affects our world. It’s available in English, French, German, Russian and Spanish and currently features studies that focus on 17 different regions, the value of cloud computing in Europe and the value of search around the world. While we can’t use industrial metrics to fully capture the Web’s contributions to our information society, as my teammate Jonathan pointed out, these reports are the best existing efforts to quantify the Internet’s contributions to the economy and society thus far.
The value that is calculated in the reports ranges from the GDP contribution of the firms who provide the essential hardware and software to power the Internet, to jobs that are created due to the low cost of IT for small businesses enabled by cloud computing.

With two billion people online today and another five billion set to join them in the next 20 years, studies predict that the Internet’s contributions will be large, increasing and distributed across sectors and people in the global economy. For example, McKinsey found that Internet search, in its broadest form, accounts for $780 billion in value across the globe each year. And only 4% of that total goes to search companies—the rest goes to consumers and corporations who harness search in order to improve the way they find and use information every day.

In some cases, the reports show the enormous potential of getting more businesses online if governments take steps to encourage commercial use of the Internet or increasing access to broadband.

In other cases, the findings project exponential growth for economies that are already engaging in e-commerce online. The Boston Consulting Group predicts that by 2015, at least 10% of the British economy will be Internet-based. Universal broadband access and creating new business models that capture consumer surplus could increase the value added by the Internet by roughly £43 billion, which is just less than half what the British government spends on education today. If similar measures are adopted by the Japanese government, small businesses alone will contribute an additional ￥5 trillion to the Japanese economy in the next five years—not to mention the ripple effects.

We hope the site will become a central repository for insight derived from new measurements and data that move toward a more complete understanding of the Web’s impact. In order to fully harness the power of this medium, we need to start using these numbers to illuminate policy decisions and light a pathway for innovation.

We’ll continue developing the site by adding more improvements over time, including more languages and content. Check back frequently for updates or choose to subscribe for alerts via email.

posted by Dorothy Chou, Senior Policy Analyst at Google

Jack and Jill the Innovator, Episode 5

Thursday, January 19, 2012

This week, we introduced our Jack and Jill the Innovator video series -- which puts a spotlight on innovators of all shapes and sizes and gives them an opportunity to tell their stories—from start-ups building cool new gadgets to moms and dads using the cloud for more efficient carpools.

Our next episode features Malcolm Collins, who among other things, works at Neurosky, a company that makes “brainwave sensors for everybody.”

You can also see more of Neurosky’s devices in action in this CNet article, “Robotic cat ears for humans, an ears-on test.”

Posted by Derek Slater, Policy Manager at Google

Our Internet

Wednesday, January 18, 2012

Engine Advocacy—the leading advocacy group for small businesses and other innovators that build on the Web—posted a video highlighting the dangers of two U.S. bills currently making their way through congress: the PROTECT IP Act (PIPA) and the Stop Online Piracy Act (SOPA). The video looks at these bills from the perspective of everyday innovators, "Jack and Jill the innovators” as we've come to call them.
SOPA and PIPA would censor the web and impose burdensome regulations on American businesses. A study in 2009 found that 3.1 million Americans are employed thanks to the interactive Internet ecosystem, the very same ecosystem whose fundamental structure would radically change if this legislation passes.
Around 7,000 sites are on strike today, and millions of people have already reached out to Congress through phone calls, letters and petitions asking them to rethink SOPA and PIPA. We hope you will too: google.com/takeaction.

Posted by Brittany Smith, Policy Associate at Google

Jack and Jill the Innovator, Episode 4

Tuesday, January 17, 2012

Public policy should be about putting numbers in action—combining the best data and insights to forge policies that help our communities grow and change together. As a citizen, the number that matters most is you. Democracies are governed by the people, and it’s their votes, their values and their hopes that should determine what policies get implemented.

That’s why we want to start sharing this new video series on Policy by the Numbers; the first three episodes uploaded to our YouTube channel. We want to help innovators of all shapes and sizes tell their stories—from start-ups building cool new gadgets to moms and dads using the cloud for more efficient carpools. It’s about their biggest hopes, deepest fears, greatest successes, most troublesome failures—everything.

To do that, we’re asking a diverse array of people the same set of questions about their lives and sharing their responses on YouTube so that everyone can get to know your neighborhood “Jack and Jill the Innovator.” We hope that sharing these stories will inspire people to think big, be optimistic about the future, and consider the huge variety of ways to drive decentralized, bottom-up innovation. In order to foster data-driven, pro-innovation public policy that embraces the future, we need to build understanding by telling stories just like these.

We’re starting off our blog series close to home with Danny Kim, the founder of LitMotors.

Full disclosure: After I met with Danny and spent time learning about him and his business, I decided to make a small investment in his company.

Posted by Derek Slater, Policy Manager at Google

Realizing the promise of e-commerce for SMEs

Friday, January 13, 2012

Several years ago, Nobel Prize winning economist Joseph Stiglitz suggested that land reform was the single most important thing governments could do to confront global poverty. He noted that democratizing the means of production was the path historically taken by every country that had climbed out of poverty, including those in Western Europe and East Asia. In the same way that land was the means of production of the past, knowledge will be the means of production of the future.

When e-commerce began in the mid-1990s, development experts swooned at its prospects of “leveling the playing field for the little guy.” Even Bill Gates gushed about the promise of “friction free capitalism” enabling small and medium enterprises (SMEs) to bypass the long chain of middlemen that take the lion's share of income.

But the truth was: even SMEs that managed to build a catalog discovered that buyers had difficulty finding it among the billions of websites on the Internet. And even if they did, they wouldn’t trust it. So besides the technical difficulties, SMEs also found it hard to establish visibility, credibility and trust.

Recently, the following dramatic technical advances have changed everything:

Major corporations now offer powerful "cloud computing" services.

A proliferation of low cost devices ranging from mobile phones to netbooks to tablets has greatly expanded the hardware choices for accessing the Internet.

Social networking services demonstrated how to leverage the power of trust.

My organization, OpenEntry.com, built an e-commerce platform offering free catalogs operating on Google’s cloud computing technology, serving more than 2,400 SME users in 44 countries. Catalogs can be built with a smartphone and instructions are in 57 languages. It also enables any business network to aggregate all the catalogs of their members—even those built with other systems—into a branded “network market” to generate visibility, credibility and trust.

Because of companies and organizations like ours, young entrepreneurs of modest means who traditionally would not be able to find jobs can exercise their skills and excel. For example, women who face cultural restrictions around their public activities can help local SMEs create their catalogs from product images sent to them electronically. And location isn’t a factor -- the United Nations Development Program documented OpenEntry’s role in generating 3,918 jobs for youth and artisan women in Nepal. With the huge volume of demand created by the estimated 100 million SMEs that will take their businesses online in the next ten years, the scope is now open for self-taught entrepreneurs to emulate Bill Gates, Steve Jobs, Larry Ellison, Michael Dell and Mark Zuckerberg, none of whom finished college.

Past history demonstrates that international trade has boosted the development of nations that escaped poverty. Current history confirms that a country’s growth is directly related to its adoption of information and communication technologies. And future history will substantiate how democratizing the confluence of global trade and the Internet will help alleviate poverty and speed the general development of national and global economies.

posted by Daniel Salcedo, founder and CEO of OpenEntry.com

Crowdfunding: connecting investors with start-ups

Thursday, December 8, 2011

New businesses drive economic growth and job creation, but today entrepreneurs are facing a global capital crunch. By some estimates, only 2.3% of startups are able to receive private financing of any kind. That’s why policymakers ought to take a close look at a new investment model called “crowdfunding” -- and how they might fix laws that could hold it back.

Imagine you need money to start your business. Instead of raising lots of money from a few people, you can raise little bits of money from lots of people, the “crowd.” You can do this through a variety of web services, which enable you to instantly ask for funding from the billions of people online today.

Consider the following examples:

Kiva has helped entrepreneurs in developing nations raise $243 million in loans since 2005.
IndieGoGo has helped over 50,000 projects around the globe get funding -- from bakeries to baby blankets, 3D printers to grocery stores, t-shirts to iPad accessories. For example, banks turned down Emmy's Organics for a small business loan, but the founders were able to use IndieGoGo to raise $15,000 to start their bakery in Ithaca, New York and are now selling in 25 states. In aggregate, IndieGoGo projects raise millions of dollars every month.
Kickstarter has helped 13,000 projects raise one million funding pledges totaling over $100 million dollars. For instance, Steve Taylor raised more than $300,000 to adapt the best-selling book Blue Like Jazz into a feature length film.

So what does this have to do with public policy? Businesses that use these platforms generally distribute non-monetary rewards to investors, like special versions of an album or a band poster. But if they’d like to give the crowd of investors a financial return, like a stake in the company’s profits, that could be illegal.

For example, in the U.S., the Securities Act of 1933 places limits on soliciting investments from the public at large and on receiving funds from non accredited investors. And while crowd-investing platforms like Seedrs are developing in the U.K., legal barriers are also present in Europe as well.

These regulatory barriers were created with good intentions: preventing fraud and facilitating trust in the stock market at a time when it was difficult for a prospective investor to get information about a business. Back then, less than 5% of people invested tradable securities. Today, more than 50% of people invest in the public markets and information is relatively abundant. In the future, investment accreditation courses could be offered online, and Yelp-like platforms could help people determine what’s a good or bad investment.

As technology changes, policymakers are rightly asking whether laws need to be updated. In the U.S., there’s bipartisan support to change regulations in ways that would enable crowdfunding while protecting against fraud.

Crowdfunding legislation, if implemented well, could jumpstart a new model of job creation and investment. Countries looking for ways to attract foreign venture capital or unlock access to domestic capital could focus on empowering their nation’s inventors by connecting them with investors, wherever they may be. In turn, crowdfunding could be a critical piece of the economic recovery puzzle.
posted by Derek Slater, Policy Manager at Google

Why data matters for public policy

Tuesday, December 6, 2011

“The purpose of computing is insight, not numbers.” - Richard Hamming

As a computer scientist and engineer, I’ve always been fascinated by the process that determines how policies and institutions are created. Unlike computing systems, policymaking is anything but binary. An unpredictable combination of special interests, money, hot topics, loyalties and many other factors shape legislation that passes into law.

Now, more than ever, we need to use data to build sound policy frameworks that facilitate innovative breakthroughs. In order to inspire confidence in the future (and the markets), governments have to lead by using today’s facts to place big bets on—not against—a better tomorrow.

To get conversations rolling, Google’s public policy team will be sharing data insights here on this blog. We’ll also be inviting researchers, policymakers and thought leaders to contribute their interpretations of various data sets and what they mean for public policy. This forum will be open to ideas, and we welcome everyone to leave comments discussing their opinions.

Measurement and analysis provide the checks and balances we need to build a better future in the information age. When we don’t examine the numbers, policy is all too often created at the expense of the next generation. The Internet generates 2.6 jobs for every one lost, and today the world’s data is doubling every two years. We need to make sure that we sustain the laws that got us the open Internet we have today, and that sound policies are in place to keep this unparalleled engine of growth going.

Public discussions that are grounded in numbers reveal whether laws are effective and relevant or failing to protect citizens’ interests. We are all entitled to our own opinions, but we are not entitled to our own facts; the facts speak for themselves and it is folly to ignore them. With this blog, we hope to spark policy debates, foster discussions among policymakers and constituents and help citizens exercise their right to hold governments accountable.
posted by Vint Cerf, Internet architect and policy enthusiast