David Jones | Creating jobs in an Innovation Economy

To prosper, the nation needs educated, healthy workers

By David Jones • Special to The Courier-Journal • March 21, 2010

As the economy starts to rebound, Washington has turned its attention to job creation. This theme dominated President Barack Obama’s State of the Union address, with calls for Congress to take various actions including, I was pleased to note, supporting entrepreneurs by eliminating capital gains tax on small-business investment.

The president’s focus on job creation began in December when the White House called more than 100 business and labor leaders to a “jobs summit” meant to elicit new ideas on getting Americans back to work. I was honored to represent the venture capital industry at the summit and share with the administration how venture capital contributes to our nation’s economic growth and innovation.

My job as a venture capitalist is to support and guide innovative young companies as they focus on rapid, profitable growth — growth that creates jobs. According to the National Venture Capital Association, venture-backed companies today account for 12 million U.S. jobs and 21 percent of U.S. GDP. Chrysalis’ experience is similar; to focus on only the local component of our work, more than 3,200 Louisvillians work today for companies that received Chrysalis investment dollars in their youth.

For the American innovation economy to prosper, however, we need more than capital. We need educated, creative workers — and America’s schools are falling short today. At the summit I praised the administration’s education reform initiatives and urged tenacity in the face of short-term pressures and incumbent opposition. To maintain America’s innovation economy, we must revive our schools so that Americans have a shot at becoming the world’s best and brightest students — and the work force best prepared for the future. It is encouraging to know that the administration is both honest about our educational challenges and ambitious in its plans to address them, even in this tough economy.

We also need a healthy population, fit enough to thrive in global competition. At the summit I also urged focus on public health issues — specifically the obesity epidemic — by calling for a “lean tech” and “lean energy” revolution to accompany the “clean tech” and “clean energy” goals of the administration. Our first lady’s decision to make childhood obesity her signature issue is perhaps the best news to come out of Washington this year — she will be brilliant at raising national consciousness and creating a sense of urgency around this national crisis.

We should not think of our education and health woes only as costly problems. They are also great opportunities for innovative new businesses that create good jobs and new national wealth. For example: Just as companies that make us aware of and help us curb fossil fuel use have created thousands of “clean tech” jobs, companies that make us aware of and help us change our diets and sedentary lifestyles will employ many people in jobs only now being invented. With some 70 percent of health care costs driven by diseases rooted in smoking and obesity, there is ample market incentive to address these costs in innovative and profitable ways. Many companies, including both established leaders like Humana and younger entrants like Chrysalis partners HealthTeacher and HealthMedia, are investing heavily and creatively in consumer empowerment, education and coaching strategies. Chrysalis reviews new proposals almost daily in the “lean tech” space. Clearly this crisis presents both risk and opportunity.

Similar stories of innovation and rebirth can play out in other sectors. In education, entrepreneurs are seizing on the potential of new technologies and business models to deliver personalized education at far lower cost, often with far better outcomes, than today’s average school — and they’re only getting started.

I believe strongly that we will succeed as a nation if we attack our problems with the innovation and zeal that built not only Google, but in earlier generations the world’s mightiest railroads and leading auto industry, the first and most reliable phone system, and so much more. The fall of these former giants shows that we have taken some wrong turns. Our problems are genuine. But I am sustained by Americans’ great history of devising breakthroughs that overcome the failings of the status quo. It is this history that drives the entrepreneur to build, and venture investor to support, the unproven, promising enterprises that will provide the great jobs of tomorrow.

David Jones is chairman and managing director of Chrysalis Ventures, a leading source of equity capital for young, growing companies in Mid-America. He is chairman of the board of Louisville-based Humana Inc.