Creating Sustainable Jobs

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Seven Ways to Create Jobs

From 1982-2000, the U.S. went 18 years without a recession, but not because old-line companies were adding employees. Rather, new companies like Intel (INTC), Microsoft (MSFT), Apple (AAPL), Wal-Mart (WMT), Starbucks (SBUX), Target (TGT), and Google (GOOG) emerged as dynamic growth engines, driven by creativity. Thousands of new companies were jump-started by ingenuity and entrepreneurship. They stimulated U.S. demand and became leading global competitors.

What can the U.S. government do to stimulate another boom in innovation and entrepreneurship? It shouldn't be by subsidizing preferred industries or funding startups. Instead, the government needs to facilitate innovation and new company formation. Here are seven things that would release the U.S. from a jobless recovery and create sustainable jobs:

1. Base capital gains taxes on the time an asset is held, with assets held for seven years or more taxed at only 10%. Investment tax credits should be dramatically increased and made permanent. These moves will stimulate company formation and capital spending.

2. Incentivize investment in research by increasing R&D tax credits and making them permanent.

3. Actively negotiate free trade agreements to open up export markets for U.S. companies to compete aggressively.

4. Accelerate federal investments in science and technology. To stimulate basic research in renewable energy sources, create a National Institute of Energy, like the National Institutes of Health.

5. Enforce patent and intellectual property rights around the world to enable American companies to realize global benefits from their research investments.

6. Expand educational grants for math and science, to encourage more young people to enter these fields.

7. Liberalize H1B visas to keep talented and entrepreneurial foreign nationals with U.S. graduate degrees in the U.S.

These actions will take time, but now is not the time to look for quick fixes. These steps will provide for sustainable gains in employment and healthy growth for the U.S economy.It's time to get started.

Bill George is professor of management practice at Harvard Business School and author of the new book, 7 Lessons for Leading in Crisis. The former chair and CEO of Medtronic, he currently serves on the boards of ExxonMobil and Goldman Sachs and previously, Novartis and Target.

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