In addition to workforce development, which is part of the Alliance Initiative for Economic Development & Jobs, the Summit will address Alliance initiatives on Health Promotion and Responsible Government. If these issues matter to you or your business, make plans now to join us at the Summit where we will make our case with top government officials and policy experts.

Others confirmed as speakers or meeting hosts include: 

• Jeff Levi, Executive Director, Trust for America’s Health
• Jane Oates, Assistant Secretary of Employment and Training at the Department of Labor
• Mark Walsh, CEO and Co-Founder, Genius Rocket
• Darrell West, Vice President & Director, Governance Studies, Founding Director, Center for Technology Innovation, Brookings Institute
• Senators John Kerry (D-MA) and Scott Brown (R-MA)

Stay tuned for more announcements, and if you have not already, be sure to sign up for the Summit (June 13), and the pre-summit dinner reception  (June 12). Help bring the voice of business leadership to Capitol Hill! 

And that’s not a bad thing at all if you would like to see something happen in the short amount of time that remains between now and the end of the legislative session on July 31st. 

Read more on Boston.com, and share your thoughts on the two versions out of Massachusetts – and how they might impact federal legislation – in the comments below.

Against that backdrop, the Alliance Health Promotion Initiative team met to discuss strategy last week, just days before Massachusetts legislators unveiled their latest attempt to address the rising cost of quality healthcare. Our meeting could not have come at a more critical time and we are proud to be involved in bringing business and government together to find new and innovative ways to reduce costs and improve the health of our population. 

Government Efforts

On Friday the Massachusetts House of Representatives unveiled a proposal to cut healthcare spending by $160 billion over the next 15 years, with a Senate version expected this Wednesday. Provisions of the House’s Health Care Quality Improvement & Cost Reduction Act of 2012 (full text here), include:

• Requiring that medical costs grow at a slower pace than the gross state product,
• Establishing a Wellness and Prevention Trust Fund to promote wellness at the community level,
• Moving towards more coordinated care and away from the fee-for-service system,
• Requiring electronic health records for all providers by 2017,
• Taxing the state’s most expensive hospitals if they can’t justify their prices.

We recognize that a healthy population and vibrant workforce is key to America’s quality of life and competitive future, and that the current health crisis threatens to undermine our economic development. In Massachusetts, the cumulative toll of chronic illness on the state economy is estimated at $34 billion – $8 billion in treatment; $26 billion in lost productivity and other economic costs. In simple terms, $3 out of every $4 spent in health care goes to treat chronic disease.

As business leaders and as citizens, we applaud Massachusetts’ efforts to stem the spiraling costs that threaten to undermine our economic development, including payment reform and chronic disease prevention. We also urge decision makers at both state and federal levels to carefully consider all options for adequately funding wellness efforts, including the removal of tax exemptions on candy and sugared drinks.

Alliance Health Initiatives

Under the leadership of co-chairs Jack Manning and Phil Edmundson, the Alliance Health Promotion Team is working to identify business innovations that can reduce healthcare costs and improve our nation’s health. This team will work together to demonstrate to the public and government the effects of integrating health into decision making throughout our companies. In addition, the team will share their experiences with state and federal policymakers, making the case for prioritizing chronic disease prevention in any efforts to reduce healthcare costs.

Get Involved

If rising healthcare costs and workplace wellness matter to you and your business, join the Alliance Health Promotion Team and help bring the best of business to bear on the crisis in this state and the nation at large. Contact Jean Gulliver to join the team, and make plans to attend the upcoming CEO Summit on Capitol Hill, where Health Promotion will be the focus of several strategy sessions. 

In the video below, West cautions that while the United States has long led the world in technological innovation, we are slowly becoming eclipsed by a number of countries in Asia. Both the private and public sector need to invest in the development and widespread application of new technology in order maintain America’s global economic competitiveness.

In the private sector, new technology has been unleashed and driven business development, market expansion and economic growth. West argues that the public sector has lagged behind in this area, even though new technology can lead to political and social innovation. Indeed, the road to smarter, more effective and more efficient government may be shorter than we think, if we are able to harness the power of technology.

We look forward to discussing the challenges and opportunities to growing the innovation economy with Dr. Darrell West when he speaks at our CEO Summit in Washington, DC, “Charting a Path for Jobs and Growth in America” on June 13. We hope you will join us.

Alliance leaders Jeff Bussgang (l) and Tim Rowe were among those invited to the White House for the signing of the JOBS Act.

Last Thursday, President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. Congress worked out a compromise on some thorny issues and now startup companies and small businesses nationwide will have access to a new source of capital through crowd-funding. We’ve blogged extensively about the benefits of this new funding mechanism and some of the risks as well. The biggest story here is probably not the content of the legislation, but the example we now have of the business community, both parties in Congress and the President working together successfully. The big stories to come should be about job growth and also effective government regulation and oversight that protects investors.

Alliance members Jeff Bussgang and Tim Rowe have been high profile advocates for the bill and were on hand to witness the signing of the bill at the White House. Tim said of the event: ”It was like a movie, walking into the East Wing of the White House, and then through a series of gardens and garden paths to the Rose Garden.  It was a magical moment, with an assemblage of fans of entrepreneurship, and the President, getting together and talking concretely about how we are going to address more of the problems facing the world through innovation.  A once in a lifetime moment.” 

This victory may seem small but the Alliance was glad to be a part of getting the job done. Can government and business work together successfully to create shared value for the public? Yes they can. 

Read Jeff Bussgang’s comments on the bill’s signing at his blog, here, and read Tim’s comments on the bill in the Huffington Post and in Xconomy.

• A crisis of confidence in the role of government;
• Insufficient investment in education, infrastructure and research;
• Demographic hurdles from an aging population, declines in real wages and social mobility, and inadequate workforce readiness;
• Ongoing climate and health crises and lingering damage from the financial meltdown.

Influential management thinker Peter Drucker famously said that every social problem is a business opportunity in disguise. We believe that to be true, and that opportunity knocks.

Our approach is to mobilize the ingenuity and entrepreneurial capabilities of business to address key challenges, working as a full partner to government and civil society. This willingness to be accountable is in essence a proposal for a new social contract. Our commitment is clear and transparent, and should generate a rich discussion of the complex system in which business operates. Our agenda includes innovation that will improve the effectiveness and accountability of the political process, government decision-making and the operational efficiency of government at all levels. It also includes many substantive reforms that surround and define the business environment and the marketplaces in which we operate.

This path forward requires business leaders to re-imagine their roles in society and see both their opportunities and responsibilities through new eyes. It requires deep engagement, reflection and learning. Finally it requires a firm commitment to lead by example. Learn more about how you can participate here, including our Washington Summit on Capitol Hill in June.

Our whole approach is really captured by simple comments made by two of our participating leaders during this year of planning. One said, “We can no longer afford a distinction between what is good for business and what is good for society.” Speaking to his reason for joining the Alliance, another told us, “If I am not on the field, someone else is playing my position.”

This is a critical time to engage. We come together with purpose and commitment in a powerful alliance for business leadership.

Part of this new launch is our new website at www.AllianceforBusinessLeadership.org, along with new contact details as well. Please update your bookmarks and address books now.

Paying More for Less
Government intervention in the free market is not always the answer. But, we cannot sustain a private health insurance system that only covers the healthy and wealthy. Indeed, Solicitor General Donald B. Verrilli, Jr. noted in his brief to the Court that the uninsured, annually, use $43 billion of health care they cannot pay for, effectively transferring those costs to other American families in the amount of approximately $1,000 per year. So, let’s be clear. In a world without universal coverage, we all pay more for less. 

Phil Edmundson, co-chair of the Alliance Health Promotion Initiative, and Chairman & CEO William Gallagher Associates, Inc.

The indirect costs of a health care system that fails to cover all Americans are just as serious as the direct costs. As government and businesses must devote more money to meet the climbing price of health care, both burn scarce resources that are critical for investment. That means you can blame the cost of health care for inadequate investment in infrastructure, research and development, education and more. The health of the national economy is severely challenged by the cost of health care and so are businesses of all sizes. And the money spent is disproportionately for chasing after treatment for illnesses that a sound system with universal access to care could help prevent.

A Way Forward
The Affordable Care Act establishes a viable public-private partnership that must be upheld if we wish to control spiraling costs. According to the Congressional Budget Office, repealing the health reform law will add $230 billion to the deficit over the next decade, leave 32 million Americans without insurance and lead to higher costs for individuals who are insured. Repeal would mark a huge step backward when we need to be moving forward in not only improving individual health, but in restoring the fiscal health of our nation and the competitive position of our businesses in a global economy.

Former White House Chief of Staff Erskine Bowles and Former Senator Alan Simpson, former Co-Chairs of the National Commission on Fiscal Responsibility and Reform, recognized in their 2011 report to Congress the urgent need for a variety of health care reforms to make our system more effective and less costly.  Now, as Co-Chairs of the Moment of Truth Project, they are continuing their crusade to reduce the deficit, with health care reform central to the effort. 

In his recent article, “The Danger of Doing Nothing,” Bowles implores the business community to join with government to move our country forward on a sustainable fiscal path.  We are ready to heed the call – for with the repeal of the Affordable Care Act hanging in the balance, the danger of doing the wrong thing weighs just as heavily upon us.  Ultimately, we must resolve the health care crisis if we are to support business growth, generate jobs and build an economy that is truly built to last.

The Supreme Court holds the power today to uphold a bold step in the right direction for health, competitiveness and the economy as a whole. Private sector ingenuity can thrive when government plays its role of laying out the playing field, and that’s how we see the Affordable Care Act. Count us in favor. 

Whatever the ultimate totals, one thing is certain: super PACs are the driving force in the 2012 election cycle and, if left unchecked, will permanently alter campaign politics as we know them. The consequence is to further undermine the effectiveness of government decision-making, which is already so compromised that it blocks the flow of capital to innovative ideas, threatens small businesses and hampers American competitiveness in the global economy.     

Legislative Remedies
Earlier this month, a number of Senators unveiled legislation that seeks to reign in the influence of super PACs by instituting more robust reporting and disclaimer requirements for super PACs. The Senate Disclose Act would require any group that spends $10,000 or more on election ads, or any other political activity, to file a disclosure report with the Federal Election Commission (FEC) within 24 hours. Groups would also have to file a new report for each additional $10,000 spent, disclose donors who gave $10,000 or more as well as provide a statement from the group’s head ratifying that there was no coordination with any campaign, which is illegal.  Additionally, the legislation would require ads to contain disclaimers by the top officials of such groups, similar to the current stand b your ad mandates require of candidates.  The filing of the Senate DISCLOSE Act comes a month after Congressman Chris Van Hollen (D-Md.) introduced similar legislations in the House. The DISCLOSE ACT 2012 in the House has 161 co-sponsors and includes many of the same provisions as the Senate bill.

The Alliance Agenda
The Alliance supports responsible efforts to mitigate the impact of the United States Supreme Court case Citizens United v.FEC that ignited this latest spending war. We strongly support the effort these bills represent to require regular reporting by super PACs, as described in our Responsible Government Initiative . Transparency is the least we can require while we search for a long-term solution. We urge business leaders to weigh in here, and in addition we urge that they disclose their own contributions to these entities if they are participating in the process. Campaign finance is a fundamental business issue because government is a necessary partner for the creation of a sustainable economy and its ability to function is compromised by the way we currently run elections in the United States. There is no doubt that business is a co-dependent in the cycle, and leadership means calling for meaningful change and walking the talk at the same time.

However, because of the high failure rate of start-ups, crowd-funding remains illegal within the United States. Because of SEC Regulations, the only people that can invest in private equities are individuals with a net worth of $1 Million or an income of 200,000 per year. This is because the SEC wants to maintain a balance between investor protection and facilitating investment, that is, they want to protect the investor from not receiving a return on their investment. It’s no secret that start-ups are likely to fail, and a failed start-up backed by a large number of crowd-sourced investors could present a disastrous legal conundrum for both the entrepreneur and the investor.  However, what opponents of crowd-funding should realize is that everything in the world of entrepreneurship is more or less a gamble. Alliance Member and CEO/Founder of the Cambridge Innovation Center, Tim Rowe, expressed at the “Accessing Capital for Small Business Panel” on February 28th, that it is ridiculous that it is legal to “make an unreasonable risk at a race track but not to invest in a neighbor’s start-up”.

Crowd-funding can and already has provided many start-ups with the opportunity for success. Recently, MIT Graduates John Kestner and David Carr got their battery powered, wireless home security sensor, dubbed “Twine”, off the ground thanks to appealing to the users of the social funding plattform, Kickstarter. With the funds they received from pledges on Kickstarter, they were able to flesh out their ideas well enough that venture capitalists started courting them as opposed to the other way around. However, Kickstarter works more as a donation platform as opposed to a long-term investment platform, so if Twine becomes a huge success, then the people who initially helped get it off the ground are not guaranteed to ever see a return on that initial contribution because they never had a stake or ownership in the business.

After having been passed by the House, by a vote of 407 to 17, in November 2011, HR 2930, The Entrepreneur Access to Capital Act, has been stuck in the Senate. This bill would finally allow small commercial enterprises to sell non-public securities via social media solicitations through the internet. Senator Scott Brown (R-MA) has also put forward another bill, which expands on the implementation of crowd-sourcing endeavors, and works to alleviate some of the concerns of crowd-sourcing opponents. His bill, the Democratizing Access to Capital Act, S.1791, caps crowd-sourced contributions at $1000 per person and also stipulates that entrepreneurs seeking crowd-funded contributions must first register on a crowd-funding website, such as Seedrs, which ensures the credibility of the entrepreneur and the protection of the investor.   The issue of whether or not an intermediary is necessary to regulate the process is up for debate as the House required no such mechanism, online or otherwise.

So, Executives, what could crowd-funding mean for your business? Is it wise to appeal to a broader range of smaller-scale investors? Crowd-funding provides a compelling opportunity for many people. In the “innovation capital” that is Massachusetts, there are many great ideas that are left unrealized because individuals don’t have the proper connections to fund their ideas. Crowd-funding will allow these individuals to raise money within their own communities and flesh out their ideas enough to attract venture capitalists. This “wisdom of the crowd” not only gives new entrepreneur’s more of an opportunity to innovate, but it also allows venture capitalists to more easily identify ideas that will change the industry. In the world of transparency brought on by social media, crowd-funding seems like an obvious choice.

The Alliance strongly supports these concepts as viable mechanisms for expanding access to capital for small businesses. Crowd-funding presents a viable option for promising entrepreneurs who do not fit the criteria of traditional sources of capitol. For young companies to truly have a shot at achieving long-term success, they need to be able to access the public markets through an IPO.  Easing the cost and time associated with the IPO process can ensure that start-ups, the small businesses driving job creation in our country, can access the capital they need to take root and grow.  It is these types of opportunities that the economy desperately needs right now.

However, we strongly believe that in order to ensure the success of crowd funding, consumer protections must be put in place. Government has a critical role to play in regulating tis process and mitigating risk with appropriate Securities and Exchange Commission oversight. The Alliance supports consumer protections that are sensible, balanced and effective. A full text of the letter sent from the Alliance to several members of the U.S. Senate is provided below.

Several Alliance members have already made their voices heard in this discussion.  Tim Rowe, CEO/Founder of the Cambridge Innovation Center, eloquently weighed in on the discussion in a piece featured today in the Huffington Post. Additionally,  Jeff Bussgang, Partner, Flybridge Capitol Partners shared valuable insight on the issue. We encourage everyone to participate in this discussion and watch this issue closely as the Senate takes action today.

Text of the Alliance letter to members of U.S. Senate:

March 19, 2012

Dear Majority Leader Reid and Minority Leader McConnell,

The Alliance for Business Leadership is a group of 150 CEOs, business leaders, entrepreneurs and investors focused on removing major obstacles to the creation of a sustainable economy. Through their businesses and via partnerships with government, our participating leaders can be relied on to speak up for ideas that produce long-term value, economic growth and prosperity for all.

Today we are writing to offer strong support for the concept of crowd-funding, a mechanism for expanding access to capital for small businesses. We enthusiastically support crowdfunding and urge the Senate to pass legislation that removes barriers that stand between small businesses and new sources of capital investment while also protecting investors from fraud and abuse.

The participating business leaders of the Alliance understand the barriers that insufficient access to capital poses to sustainable economic growth. While small businesses, including start-up companies, create the majority of new jobs in the United States, they face enormous challenges securing the financing they need to take root and grow. Unlocking new sources of capital can unleash a wave of entrepreneurship in this country, bring new innovations to market, invigorate our economy, and create jobs.

Crowd-funding presents a viable alternative route for promising entrepreneurs who do not fit the criteria of some traditional sources of capital. By selling non-public securities via social media channels, entrepreneurs can source capital at the grassroots level. Many Americans are looking for exactly this type of opportunity: to invest in local start-ups that stand to create jobs and bolster the tax base in their own communities while delivering innovative and valuable products and services.

Of course, to ensure the success of crowd funding, consumer protections must be established. Government has an essential role to play in regulating this process and mitigating risk with appropriate Securities and Exchange Commission oversight. The Alliance supports consumer protections that are sensible, balanced and effective. What kind of government action do we support in this context? Limiting the size of individual investments in a crowd-funded venture; requiring companies to go through an SEC-registered intermediary to raise funds; and affording state regulators the right to prosecute fraud are three specific ways to open this opportunity for entrepreneurs while protecting investors.

We believe we need to act swiftly. While crowd funding is restricted in the United States, we are watching this form of micro-finance spread across the global economy. In the United Kingdom, for example, Amy Cortese, author of Locavesting: The Revolution in Local Investing and Hot to Profit From It, reports that crowd-funding internet sites have been operating for more than two years without any reports of fraud. A London-based website, Funding Circle, has raised more than £23 million in loans for British small businesses and generated an average gross yield of 8% for its investors.

America’s entrepreneurial spirit has long underscored our global economic competitiveness. If we wish to sustain it, we must support entrepreneurs and the opportunity for innovation that their vision and determination presents. Indeed, we cannot expect to have an economy that is built to last if the right mix of opportunity is not poured into the foundation. The proposition we support is that with the proper framework in place, crowd-funding can create opportunity.

We appreciate your efforts to support sustainable economic growth in our country, and we look forward to working with the United States Senate to ensure passage of this critical legislation.