Kauffman-Rand Center for the Study of Small Business and Regulation Is Launched

The RAND Corporation has launched the Kauffman-RAND Center for the Study of Small Business and Regulation, which will study the way legal and regulatory policymaking affect small businesses and entrepreneurship.

The center—operated by the RAND Institute for Civil Justice—is made possible by a grant from the Ewing Marion Kauffman Foundation, which works with partners to encourage entrepreneurship across America and improve the education of children and youth.

The Kauffman-RAND Center will endeavor to assess and improve legal and regulatory policymaking as it relates specifically to small businesses and entrepreneurship in a wide range of settings, including corporate governance, employment law, consumer law, securities regulation, and business ethics.

The center will:

• Conduct research on the impact of specific types of regulation on small businesses.
• Improve the measurement of the impact of regulation and litigation on small businesses, job growth and economic activity.
• Identify approaches that achieve policy goals without unintended consequences for small businesses.

According to the U.S. Small Business Administration, small businesses represent more than 99 percent of all employers and employ 50 percent of all private-sector workers. In addition, small businesses produce more than 70 percent of all the net new jobs, and more than half of all private sector output. Small businesses represent 97 percent of all U.S. exporters. Yet small businesses are often overlooked in the research and regulatory community.

The center director is Susan Gates, who has worked as an economist at RAND for nine years and has a Ph.D. in Economic Analysis and Policy from the Stanford Graduate School of Business at Stanford University. Gates has focused her RAND research on improving public sector organizations and the economics of organizations.

“Most policy research on business regulation and litigation looks almost exclusively at large businesses,” Gates said. “It is risky to ignore virtually 50 percent of economic activity in making policy decisions. What we’re trying to do is bring more attention to small businesses so that government officials will be better able to consider their interests in the policymaking process.”

Several Kauffman-RAND Center studies have already begun on topics including the history of small business regulation, the identification of less burdensome approaches for addressing safety problems at small businesses, the impact of changes to the auditing and accounting environment on small businesses, and approaches to measuring and assessing regulatory burdens on businesses of various sizes.

Carl Schramm, President and CEO of the Ewing Marion Kauffman Foundation, said: “We are very pleased to have the RAND Corporation address these important issues. The research agenda of the new center is entirely consistent with our foundation’s mission of promoting small business and entrepreneurship.”

The projects funded through the center will involve researchers from RAND and several other institutions and organizations. The center will also solicit input from policymakers on the research agenda and on the research in progress.